Last week’s interest rate cut by the US Federal Reserve might have been cheered by markets but it came at an awkward time for Hong Kong, which pegs its own currency to the greenback.

A 50 basis points cut in the Fed funds rate to 4.75 per cent was a tonic for America’s crisis-struck economy. But it was not what most doctors would have ordered for a small territory of 7m people enjoying average annual gross domestic product growth of 7 per cent over the past four years, a stock market up more than 35 per cent this year and soaring property prices.