Rampant speculation that a meeting next Monday between President Barack Obama and Chinese leader Hu Jintao will lead to appreciation of the Chinese RMB currency led Hong Kong sharply higher this week in robust turnover.

In just three days of trading after the Easter Holiday the blue-chip Hang Seng Index jumped 3.1%, 671 points, to 22,208. Before the current strong rally began two weeks ago, the Index had struggled for weeks to stay above 21,000. The index for Chinese companies rose this week 2.8%, 351 points, to 13,047.

The U.S. has long pressured China to raise the value of the RMB to help ease America’s enormous trade deficit. But the Chinese suspended gradual appreciation in recent years to protect their important export sector during the global recession.

That is expected to change next week when Obama and Hu meet. And since many Hong Kong-listed companies get most of their revenue in RMB, investors have been almost giddy.

“This week expectation for RMB appreciation has moved the market,” Conita Hung, head of equities at Delta Asia Financial, told the Weekly Roundup. “Also some individual companies’ results have performed well.”

Next week, the big Chinese banks that have led the rally will probably consolidate their gains, Hung said. A moderate rise in the RMB will help airlines and telecommunications companies, she said.

Corporate results won’t be much of a factor, according to Hung, because the reporting season is almost over. And a lot will depend on whether China’s March economic data will indicate further monetary tightening.

Hung predicts the market will trade between 21,500 and 22,400. “I expect Hong Kong will test higher,” she said.