Expect further weakness ahead for the currency.
According to Bloomberg, for a pegged currency, Hong Kong’s dollar is once again posting some outsized moves. The city’s dollar -- linked to the greenback since 1983 -- is falling at the fastest pace in 14 months as a widening interest-rate gap with the U.S. reduces the lure of the city’s assets. Local banks, awash with capital and competing for red-hot mortgage demand, are in no rush to follow the Federal Reserve and charge more for loans. That means further weakness ahead for the local currency, according to Mizuho Bank Ltd. and Standard Chartered Plc.
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