The local currency fell 0.02 percent from late Friday trade in Asia, having earlier hit an intraday low of 7.7526 against the US dollar. Dealers attributed the fall in part due to weakness in the stock market, and as the greenback gained against major currencies.
The US dollar rose against a basket of currencies on Monday, extending sharp gains made late last week as US Treasury yields rose to seven-month highs after key jobs data. The US Labour Department on Friday said US employers cut 345,000 jobs in May, the fewest since September and far fewer than economists had forecast.
The Hong Kong currency is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85. Local interbank rates were marked higher, particularly at the longer-dated maturity, led by a rise in Hong Kong dollar interest rate swaps after a surge in US bond yields, dealers said.
One-year Hibor was fixed at 1.22071 percent on Monday morning, up 14 basis points from Friday. US short-term interest rate futures, which track market expectations for Fed rate policy, made their first meaningful move in months on Friday - advancing the possible timing of the first Fed rate increase to late 2009 from early 2010.
Hong Kong tends to track US rate cycles because its currency is pegged to the US dollar. However, one dealer at a European bank said he doubted the Fed would raise interest rates this year as there were mixed signals from the US economy. The US unemployment rate hit 9.4 percent, its highest since 1983.
Comments
Comments are closed.