The Hong Kong dollar and discounts on Hong Kong dollar forwards moved in a tight range on Thursday in cautious trade as players awaited key US payrolls data due the following day.
After shuffling between 7.7995 and 7.7998 throughout the day, the local currency was at 7.7995/96 per US dollar, a touch firmer than 7.7997/98 in late Asian trade on Wednesday. The discount on one-year forwards widened to 460/440 pips in late afternoon from Wednesday's close of 450/430 pips.
"There has been some buying interest in the spot and forwards markets in recent sessions, but it was offset by heavy selling from a big US house," one senior trader at a local bank said.
Some dealers expected the one-year forwards to be supported at a discount of 500 pips in the near term. "Further downside should be limited, given expectations of higher interest rates this year," one dealer from a European bank said.
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