The Hong Kong dollar softened on Wednesday but trading was confined to a narrow range and took a cue from the general weakeness in other Asian currencies, dealers said. The Hong Kong dollar fell to a four-day low of 7.7728 per US dollar earlier in the day before recovering to 7.7718/20 compared with 7.7707/08 in late Asian trade on Tuesday.
Asian currencies have been under pressure on oil woes. US crude oil futures were trading around US $70.3 at 0918 GMT, just off Tuesday's record high of US $70.85 a barrel.
There are worries that high oil prices could dent domestic consumption in some countries or spark inflation, which could see interest rates rise, which in turn would slow economic growth.
"Soaring oil prices will hurt global economies and Hong Kong exports," said a dealer from a local bank.
The United States is Hong Kong's second-biggest trading partner.
The US dollar was at 111.43/48 yen. The Taiwan dollar fell to a nine-and-a-half month low against the US dollar and the South Korean won slid to its lowest close in six weeks.
Hong Kong dollar forward rates were rangebound in a tight band, dealers said.
The discount on one-year forwards was quoted at 120/100 pips late on Wednesday, versus 105/95 pips earlier in the day and narrowing from Tuesday's close of 130/110 pips.
In the cash market, short-term interbank rates edged off morning highs after a major lender offered one-month liquidity.
The one-month rate was quoted at 3.58/3.60 percent versus 3.62/3.63 percent in the morning session.
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