HKMA's recent currency intervention to end HK's peg to the RMB

But such a change is still several years away.

According to BBVA, in news that has caught the attention of investors, the Hong Kong Monetary Authority bought USD 603 million on Friday when the currency rose to 7.750 against the USD, the strong end of the 7.75-7.85 trading band under Hong Kong’s linked exchange rate system.

Here's more from BBVA:

The move marked the HKMA’s first intervention since late 2009, and is a sign of capital inflows into Hong Kong resulting from improved global risk appetite and, quite possibly, the US Fed’s QE3 policy.

The currency move might reinforce speculation of an eventual end to Hong Kong’s currency system in favor of a peg to the Chinese RMB or a basket of currencies.

However, given the pros and cons, and the RMB’s lack of convertibility, we continue to believe that such as change is still several years away. The currency ended today at 7.7502/USD.