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Hong Kong's dollar peg in spotlight ahead of expected Fed rate hike

U.S. short seller Kyle Bass betting decades-old arrangement could soon crumble

A widely expected rate hike by the Federal Reserve is stoking more Hong Kong dollar selling and upping speculation that the city's ability to maintain the decades-old peg against the U.S. dollar is being stretched too far. (Photo by Ken Kobayashi)

HONG KONG -- The Hong Kong dollar's peg to the greenback is drawing fresh scrutiny as another expected U.S. interest rate hike ramps up capital flows out of the city.

Authorities in the financial hub have repeatedly stepped into currency markets over the past few months, buying Hong Kong dollars to prop up the sliding currency as investors dump it in favor of the U.S. dollar.

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