The Hong Kong dollar strengthened on Tuesday as funds flowed into the local stock market and the US dollar retreated against major currencies. The Hong Kong dollar was trading at 7.7721/22 to the US dollar in late trade, compared with 7.7724/26 in mid-morning and up from 7.7734/36 late on Monday.
Trading volumes on the stock market jumped as the benchmark Hang Seng Index climbed 1 percent to a 41/2 year closing high.
Traders expected more fund flows to the region amid signs some global investors were reducing their US dollar holdings, which sent the greenback sliding against major currencies on Tuesday.