Hong Kong Dollar Forwards Sink to Weakest Since '99 on Peg Bets
- Hang Seng Index tumbles as 10-year government yields surge
- Three-Month Interbank Lending Rate Climbs by Most Since 2008
A man in a suit stands at a street crossing in the business district of Central in Hong Kong. Hong Kong dollar forwards sank to their weakest level this century.
Photographer: Brent Lewin/BloombergHong Kong dollar forwards sank to their weakest level this century, interbank loan rates jumped the most in seven years and the Hang Seng Index tumbled as China’s market turmoil fueled speculation the city’s 32-year-old currency peg will end.
Contracts to buy the currency in 12 months fell as much as 0.5 percent to HK$7.9056 versus the greenback, beyond the HK$7.75-HK$7.85 range that it can trade within under the existing exchange-rate system. The Hong Kong dollar spot rate dropped as low as HK$7.8243, within 0.33 percent of the weak end of its band, and a benchmark rate for three-month loans rose eight basis points to 0.55 percent.