The Hong Kong dollar inched higher but held within a narrow range on Monday as market attention was fixed on a steady stream of IPO activity. The local currency traded between 7.7501 and 7.7503 on the day, near the upper end of its tight band to the US dollar.
One dealer said trading was cautious amid a drop in the domestic stock market and a spate of upcoming IPOs. He expected the spot rate to hover in a 7.7500-7.7510 range this week. Hong Kong's Hang Seng Index was down 0.94 percent at the midday break on Monday, while the China Enterprises Index of top mainland companies fell 0.63 percent.
The Hong Kong dollar is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85. The Hong Kong Monetary Authority (HKMA) is usually obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85. Local interbank rates were a tad higher, partly due to IPO activities, dealers said.
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