The Hong Kong dollar edged higher against the greenback on Monday after local banks decided to raise interest rates. "The interest rate differential between the Hong Kong dollar and the US dollar has narrowed, so arbitrage trades are becoming less attractive and also prompting some players to unload US dollar positions," said a dealer from a French bank.
The local currency firmed to 7.7983 per US dollar before settling at 7.7991/92 but was still higher than 7.7995/96 in late Asian trade on Friday.
Hong Kong dollar forwards were rangebound with discounts ending marginally wider on the back of the firmer local currency.
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