HONG KONG -- The Hong Kong dollar's fall to the lowest level since the global financial crisis last week has raised anxiety among currency traders who now see a higher likelihood of market intervention. A nervous market has in turn made the currency more vulnerable to wild swings.
Under a currency board system, the Hong Kong dollar is pegged to the greenback at a range of HK$7.75-7.85. The exchange rate hovered at close to the HK$7.75 ceiling at the start of 2017, but it has declined gradually to fall to near HK$7.8275 on Aug. 9. That price is within arm's reach of the HK$7.8294 low recorded on Jan. 20, 2016.
