Hong Kong’s currency is closely following the trajectory of the US dollar, reflecting the dynamics of its linked exchange rate system.

Under this system, the Hong Kong dollar is pegged to the US dollar within a narrow band. This mechanism ensures relative stability but also means that when the US dollar weakens, the Hong Kong dollar tends to follow suit.

This correlation is a key feature of Hong Kong’s monetary policy, designed to maintain exchange rate stability and investor confidence in the face of global market fluctuations.