The Hong Kong dollar rose against the US dollar on Thursday, but trading was confined to a narrow range. The domestic currency was trading at 7.7707/09 against the US dollar, firmer than the previous day's close of 7.7718/19, after shuffling between 7.7705 and 7.7713.
One trader at a European bank attributed the gains to a rebound in the local stock market and the strength of the Chinese yuan. Hong Kong's benchmark Hang Seng Index rose 1.07 percent on Thursday, while the China Enterprises index of H shares gained 2.1 percent.
China's yuan closed at 7.8185 per US dollar on Thursday, after hitting a new post-revaluation intra-day high of 7.8180 in the morning session, approaching parity with the Hong Kong dollar. US Treasury Secretary Henry Paulson urged China on Thursday to work towards a freely floating exchange rate to help disarm critics of Beijing's trade and currency policies. The Hong Kong dollar is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85.
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