Currency remains a worry, with hedging seen as answer

Article Abstract:

Concerns about the soundness of the Hong Kong currency have resulted in the fall of stock prices in the city to their lowest level since 1995. Companies with unhedged debts are in jeopardy since international investors are already aggressively disposing of the shares and bonds of Hong Kong firms that are not hedged with US dollars. The Hong Kong dollar ranks as the last freely traded Asian currency that has yet to depreciate because of the government's efforts to keep the currency pegged close to a rate of 7.8 Hong Kong dollars to US dollars.

Hedging (Finance)

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Devaluation of Yuan isn't likely to be in the cards

Article Abstract:

Foreign exchange analysts believe that the Chinese government will not allow the yuan to be devalued even as its exchange rate in the black market continues to fall. Chinese vice premier Zhu Rongji reiterated the government's policy by announcing that the government will retain the 8.3 yuan to a US dollar exchange rate. Analysts worry that any move by China to increase export competitiveness by lowering the yuan could aggravate the economic crisis in Asia.

China, Yuan (China)

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Peg for local currency is tested by region's crisis: city faces more pressure to devalue its dollar as neighbors appear a better investment bargain

Article Abstract:

Hong Kong regulators are considering a move that will free the Hong Kong currency from the US dollar amidst the pressure from newly cheap Asian currencies. Regulators and investors worry that freeing the peg would result in a loss of investor confidence in the country. They also worry that keeping the peg would devalue some investments in the country particularly the property markets faced with oversupply and depleted finances.

Analysis, Interpretation and construction, Monetary policy

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