Foreign Exchange Market

The global foreign exchange (forex) market has ballooned in recent decades as more and more economies liberalise their capital accounts. The Basel-based Bank for International Settlements said average daily turnover in global forex markets was an estimated US$3.98 trillion as of April 2010.

Under the linked exchange rate system, the HKMA is mandated to prevent the currency from breaching either side of a trading band, between 7.75 and 7.85 per US dollar. Photo: SCMP

HKMA poised to act as Hong Kong’s dollar weakens to its lower limit

Hong Kong’s dollar has had its worst week in three months, deteriorating further against the US dollar after the city’s monetary authority (HKMA) cleared the way for the currency to weaken to the lower limit of a trading band before it intervenes in the market to prop it up.