The Hong Kong dollar hovered near its linked exchange rate of 7.80 to the US dollar on Monday, reigning worries about imminent fund outflows, dealers said. "The market is still affected by the interest rate differentials," said a trader from a local bank. The local currency has been under pressure because US interest rates are higher than Hong Kong rates, enabling traders to earn an interest rate spread if they sell Hong Kong dollars for US dollars.

The Hong Kong dollar clung between 7.7998 and 7.7999 against the greenback for most of the day, flat from Friday's close in Asian trade.

Copyright Reuters, 2005