The Hong Kong dollar was trapped in a narrow range on Friday as players kept to the sidelines ahead of a key US jobs report later in the day. The currency was trading at 7.7774/75 against the US dollar, after moving in a tiny six-tick range during the session, barely changed from Thursday's close of 7.7773/75.
The Hong Kong dollar is linked to the US dollar and is allowed to trade between 7.75 and 7.85 to the US dollar. The US non-farm payrolls data for October is due to be released at 1330 GMT. The median forecast of economists polled by Reuters last week predicted an increase of 125,000 jobs in October following a gain of 51,000 in September.
"Recent soft data in the US manufacturing sector fuelled expectations the Fed might cut interest rates. If the payrolls figures come out weaker than expected, it may suggest a slowdown in the US economy and put pressure on the (US) dollar," one trader said. Another dealer at a local bank said the Hong Kong dollar would gain some support in the near term due to positive sentiment in the stock market.
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