The Hong Kong dollar recouped some early losses to end marginally lower against the US dollar on Tuesday as some short-term players moved to take profits from the US currency's recent rally. The local currency fell to as low as 7.7582 in the morning session before clawing back to 7.7571 late in the afternoon, but it was still slightly softer than late Monday trade in Asia.
One dealer said there was some selling interest in the US dollar in afternoon trade. Probably some market players reversed their positions or took profits after the (USD/HKD) spot rate met resistance above 7.7580. The Hong Kong dollar has suffered selling pressure in recent sessions, partly due to weakness in the stock market.
Another dealer at a European bank expected the spot rate to consolidate in a range of 7.7550 to 7.7580 in the next few sessions. Hong Kong stocks closed 2.3 percent lower on Tuesday, with shares in HSBC plunging after the bank announced a $17.7 billion rights issue at a deep discount and slashed its annual dividend. The Hong Kong currency is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85.
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