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Hong Kong Dollar Drops the Most Since 2016

  • One-month Hibor-Libor spread expands to largest since 2008
  • Currency won’t touch weak end of trading band soon: analyst
Shorting Hong Kong dollar becomes lucrative again as Hibor-Libor gap widens
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Hong Kong’s dollar weakened the most since February 2016, unwinding some of last week’s jump, as a widening interest-rate gap made it more lucrative to borrow the currency to buy the greenback.

The city’s currency dropped 0.24 percent to HK$7.8357 per dollar as of 4:55 p.m. local time. That came as the cost to borrow one-month money in Hong Kong’s interbank market -- known as Hibor -- slid for a 10th straight day. It’s now the cheapest since April 2008 when compared with U.S. rates.