This does not mean that either the Hong Kong dollar or the yuan are out of the woods.
Since the Hong Kong dollar is pegged to its U.S. counterpart, interest rates in the two jurisdictions historically have been much closer together.
That is not so easy for Hong Kong, which cannot lower costs through a depreciating currency because the Hong Kong dollar is pegged to the greenback.
The ideal scenario: the yen stabilizing at current levels, the renminbi and the Hong Kong dollar holding firm, and Wall Street and Europe coming in for a soft landing.
Indeed, the territory's financial secretary, Antony Leung, gave warning that the Hong Kong dollar's longstanding peg to the American dollar might come under strain if the SARS outbreak is not resolved soon.
Financial markets shared Wall Street's relief that Brazil was not digging in for a protracted battle over its currency, and there was no sign of a speculative attack against the Hong Kong dollar.
On August 15th the Hong Kong Monetary Authority pushed interbank rates up to levels not seen since the Mexican peso crisis in 1995, to counter what it said was a speculative attack on the Hong Kong dollar.
HSBC, a London-based banking group with large interests in Hong Kong, switched its reporting from sterling to American dollars on the ground that the majority of its revenues are in the greenback or currencies linked to it, such as the Hong Kong dollar.
Local interest rates would then rise to punitive levels, banks would come under intolerable strain, and the link between the American dollar and Hong Kong's dollar would be in jeopardy.
' When you try to live off selling 100-Hong Kong-dollar-shirts, it catches up with you.
Hong Kong keeps its dollar stable by backing each dollar's worth of local money by one American dollar of reserves.
It could be the Hong Kong Bank of China, a private commercial bank, which is already issuing dollar-linked banknotes in Hong Kong, which circulate alongside banknotes from the government and other private banks.
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Japanese stocks climbed for the seventh successive session on Friday, reaching a fresh multiyear high, as the yen fell against the U.S. dollar, while Hong Kong and Australian markets rose after trade figures kicked off China's monthly economic data.
Hong Kong manages its exchange rate through a currency board, which holds one American dollar to back every 7.8 dollars in Hong Kong's money supply.
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There are near zero to negative rates in Japan, and even Hong Kong, which is pegged to the dollar.
In addition, both Singapore and Hong Kong manage their exchange rates against the American dollar.
The Gulf States of the Middle East and Malaysia also have a dollar peg, as does Hong Kong, Macau and, surprisingly, Venezuela and Lebanon.
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At the time, private investors were selling in the belief that Hong Kong would have to abandon its currency peg to the dollar.
The model is Hong Kong, which introduced a currency board, tying its dollar tightly to the American dollar, amid a panic in 1983.
China is off 16% in dollar terms, Germany, 20%, Hong Kong, 18%, India, 23%, Brazil, 27%, and Singapore, 12%.
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Look for ETFs that own stocks traded in Shanghai, Hong Kong and Mexico City, since the yuan, the HK dollar and the peso have been relatively steady against the dollar.
The dollar was at 6.1905 late Monday in Hong Kong, higher than 6.1565 late Friday, thanks in part to demand from hedge funds.
Last year his group and the Hong Kong government announced that they were jointly developing the multi-billion dollar CyberPort, a high-tech incubation project.
Through his children, he was introduced to Steven Hanke, an American economist who believes that the way to restore confidence in Indonesia's economy is through pegging the rupiah to the dollar by means of a currency board, as Hong Kong, Argentina, Bulgaria and others do.
The yen traded near 96.6685 against the dollar as of 5:07p.m. in Hong Kong.
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