The following is a snapshot of the Hong Kong foreign exchange and money markets on Wednesday. The Hong Kong dollar rose to a two-and-a-half month high against the US dollar on Wednesday, partly driven by demand for funds for forthcoming IPOs.
The local currency was at 7.7894/96 at 0318 GMT, up 0.08 percent from the late Tuesday close in Asia. It hit a session high of 7.7883, its strongest since December 4, 2007, according to Reuters data. One dealer at a European bank attributed the gains to the US dollar's weakness in the global market and a spate of IPOs in the territory boosted demand for the local currency.
He expected the USD/HKD spot rate to move in a 7.7880-7.7920 range in the near term. The Hong Kong dollar is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85. The US dollar hit a record low against the euro and a basket of other currencies after weak economic data and comments from a Federal Reserve top official signalled more interest rate cuts. Local interbank rates were mixed. Short-dated rates were steady to a touch higher on IPO-related funds demand, while longer-dated rates tracked US bond yields lower overnight.
China oil rig manufacturer Honghua Group Ltd opened its retail offering on Monday, with a trading debut set for March 7. Another listing candidate, China Railway Construction Corp, plans to raise up to $2.3 billion in the Hong Kong portion of its IPO. It will open its retail sales book on Friday, with a trading debut set for March 13.
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