December 21, 2017 / 3:43 AM / 3 months ago

Hong Kong dollar falls to weakest in nearly two years

HONG KONG, Dec 21 (Reuters) - The Hong Kong dollar fell to its softest level in nearly two years against the U.S. dollar in late morning trade on Thursday.

The local currency changed hands at 7.8278 per dollar, its weakest since Jan. 20, 2016.

The Hong Kong dollar’s depreciation is due to strong demand for U.S. dollars near the end of the year and its weakness is expected to continue as monetary policy normalisation and U.S. tax cuts could bring more funds back to the United States.

The Hong Kong dollar, pegged against the greenback, fluctuates between 7.75 and 7.85 per dollar, and the HKMA is required to intervene if it hits either end of the currency band. (Reporting by Michelle Chen; Editing by Jacqueline Wong)

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