The Hong Kong Monetary Authority on Wednesday surprised financial markets by introducing a ceiling on its currency in an effort to discourage speculative investment into the territory.

The Hong Kong dollar, which has been pegged at HK$7.8 to the US dollar since 1983, will not be allowed to strengthen beyond HK$7.75 with immediate effect. It will also not be able to weaken below HK$7.85, a shift which will be achieved over the next five weeks.