The Hong Kong dollar fell against a broadly stronger US dollar on Friday, as risk averson hammered global stock markets after an unexpected rise in US jobless claims and on concerns over the fiscal problems in the euro zone area. The local currency was quoted at 7.7714 per dollar at 0514 GMT after falling to as low as 7.7719 early in the morning.
Dealers attributed the fall to the US dollar's strength in the global markets, and fears about a potential capital outflow amid weakness in the equity market. Asian stocks tumbled on Friday as investors dumped riskier assets due to rising sovereign debt problems in the euro zone and poor jobs data. Hong Kong's Hang Seng Index was down 2.91 percent at the midday break, the lowest since September 3, 2009. The China Enterprise Index of top locally listed mainland companies had dropped 3.67 percent.
The dollar index, a gauge of the greenback's performance against major currencies, rose 0.3 percent to 80.158 after touching 80.283, its highest since mid-July 2009. A trader said near-term resistance for the USD/HKD spot rate was expected at 7.7740. 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 trapped in a narrow range.
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