The Hong Kong dollar nudged higher against the US dollar on Tuesday, with sentiment lifted by a rebound in the city's stock market. The local currency strengthened to 7.7501, near the upper end of its tight band to the US dollar. Hong Kong stocks recovered on Tuesday, snapping a four-day slump, with the Hang Seng Index gaining 2.25 percent and the Chinese Enterprise Index of top locally listed mainland companies up 2.41 percent.
Some dealers said the local currency was likely to stay in a narrow range, with attention focusing on fund flows and a key US jobs report due on Friday. One dealer at a European bank projected the spot rate to move within a range between 7.7500 and 7.7510 this week. The Hong Kong dollar is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85. Local interbank rates were steady and hovered at a similar level to the previous session. A dealer said the market was quiet and IPO-related fund demand was cooling down, after the shares of some newly listed companies fell below their IPO prices.
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