The Hong Kong dollar inched higher against the US dollar on Monday but some traders said there was buying interest in both currencies, confining the Hong Kong currency to a tight range between 7.7500 and 7.7506 to the US dollar. It was quoted at 7.7505/06 at up marginally from late Friday trade in Asia.
"We've seen good two-way business. There was some selling interest in the US dollar from local banks in early trade, while buying interest came from big names," one trader said. Another dealer attributed the gains to safe-haven inflows. He added that the Hong Kong dollar bucked the weaker trend of most regional currencies and shrugged off a correction in equity markets.
Some investors considered Hong Kong a safe haven to park money. Most Asian currencies fell against the US dollar, which firmed broadly as investors took profit on other major currencies, which had climbed to multi-month highs on hopes of a recovery in the global economy.
Hong Kong stocks plunged on Monday, snapping a three-day winning streak, knocked down by lower energy prices and after the main index hit a nine-month high last week. The Hong Kong currency is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85.
Short-dated interbank rates remained at low levels because of abundant liquidity in the banking system. The overnight rate was quoted at 0.0001 percent. The one-month to one-year interbank rates fell on Monday, tracking softer US dollar rates, dealers said. Three-month Hibor was fixed at 0.34393 percent on Monday morning, dipping from Friday's 0.34429 percent. One-year Hibor fell to 1.19857 percent from 1.22714 percent on Friday.
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