Hong Kong's retail investors might have given stocks the cold shoulder lately, but demand for foreign currencies is heating up. 'I bought the Australian dollar when it was worth just over HK$4,' said Winnie Tsang, a housewife whose son is studying in Sydney. 'Now my savings [in Australia] have doubled and I don't have to buy more to pay my son's college fees. I have even sold some of it.' Higher yielding currencies - such as the Australian and New Zealand dollars - appeal to Hong Kong savers who face low interest rates on their Hong Kong dollar and US dollar bank deposits. Savers can get annual interest on deposits of the aussie and kiwi - as the currencies are known - of 2.8 per cent and 1.3 per cent, respectively, in Hong Kong. By comparison, Hong Kong dollar holdings earn just 0.2 per cent. According to the Hong Kong Monetary Authority, foreign currency deposits grew 1.9 per cent in July from June to HK$3.62 trillion. Yuan deposits rose 3.4 per cent to 572.2 billion yuan (HK$697.5 billion). Hong Kong investors buy and sell currencies around the clock using the internet, according to Josephine Lee, a director of wealth management at Citibank. 'Our customers are trading and settling transactions in the hours when the European and US markets are operating,' Lee said, adding high inflation in the city had encouraged investors to consider foreign currencies in view of the low interest earned on their Hong Kong dollar savings. But currency trading has its risks. The Swiss National Bank said on Tuesday it was determined to cap the Swiss franc at 1.20 (HK$11.87) per euro, triggering a steep fall in the franc. The Japanese yen and the Swiss franc are often favoured in so-called carry trades because of their low interest rates and stability. In carry trades, speculators borrow in low-interest-rate currencies and then invest in high-interest-rate currencies, pocketing the interest-rate difference. Bruno Lee, a regional head of wealth management for Asia-Pacific at HSBC, said Hong Kong retail investors' exposure to the Swiss franc was relatively small. The franc has gained more than 20 per cent against the euro and many traders had expected the record surge would not last. 'A lot of these trades would have been unwound back in August,' said Ronald Ip, a director for wealth solutions group at HSBC Global Markets.