The head of the European Commission's SAR office has ruled out suggestions that the Hong Kong currency could be de-linked from the US dollar and re-pegged to the euro. Etienne Reuter described the idea as 'far-fetched' and said 'no one [in Europe] expects that'. Mr Reuter said the US dollar peg was so politically charged that it was unlikely to go even though Euroland, as the 11 European member states opting for a single currency are known, was set to become a dominant trade and financial centre. Because of the currency board, Hong Kong would continue to hold more than 90 per cent of its reserves in the US currency, concluded Mr Reuter. Last month, Toru Kusukawa, chairman of Japan's Fuji Research Institute, said East Asian economies would be better off loosely pegging their currencies to a three-tier basket comprising the US dollar, the euro and the Japanese yen to avert a future crisis. Mr Reuter said the scepticism that had prevailed in Hong Kong over the euro, to be launched on January 1, had given way to curiosity and interest. 'People realise Europe supports Hong Kong under one country, two systems and it sees the territory as a partner in trade.' People in Hong Kong had come to realise that the euro was a success story and their perception had not been clouded by the negative image portrayed in the United States and British media. Thursday's concerted cut in interest rates by the 11 euro countries suggested that growth in Europe was feeling the effects of the Asian crisis, Mr Reuter said. The 11 initial members of the EU are the world's largest trading entity.