The Hong Kong dollar rose to a three-week high against the US currency on Friday, buoyed by fund flows into the territory's stock market and lingering speculation of possible further appreciation of the yuan.
The local currency firmed to 7.7572/73 to the US dollar, its highest point since March 17, compared with Thursday's close of 7.7590/92. One dealer at a Chinese bank said demand for Hong Kong dollars might be related to the settlement of stock purchases by investors earlier this week.
Hong Kong blue chip stocks advanced to a fresh 5-1/2 year high on Friday, with the benchmark Hang Seng index rising 0.37 percent.
Some dealers suspected the inflow of hot money was in part due to expectation of yuan appreciation ahead of President Hu Jintao's visit to the United States later in the month. Hong Kong currency is pegged to the US dollar and is allowed to trade between 7.75 and 7.85 to the US unit.
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