Discounts on Hong Kong dollar forwards narrowed on Friday afternoon following the direction in yuan non-deliverable forwards (NDFs) as some investors covered short positions ahead of the weekend, dealers said.
"There was some short-covering on USD/CNY non-deliverable forwards positions, with the one-year yuan NDFs trading to 2,350 points from its opening at 2,750 points," said a dealer from a Japanese bank.
The market has been choppy in recent sessions with discounts on forwards moving on remarks from US Treasury Secretary John Snow this week that have raised renewed speculation about a revaluation of the yuan.
In the spot market, the Hong Kong dollar exchange rate weakened to 7.7998/99 per US dollar from 7.7994/95 in late Asian trade on Thursday.
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