The Hong Kong dollar inched higher against the US dollar on Tuesday, while long-dated interbank rates continued to track US dollar rates higher on speculation the Federal Reserve could raise interest rates later this year. The local currency was up 0.01 percent from late Monday trade in Asia, after shuffling between 7.7515 and 7.7524.
One dealer attributed the modest gains in part due to the US dollar weakened on the global markets. Another dealer said the USD/HKD spot rate was likely to hold to rangebound trading and he had not seen significant capital outflows even after a recent correction in the stock market.
The US dollar index, which gauges its performance against a basket of major currencies, fell 0.15 percent to 80.701. Hong Kong stocks sank for a second straight session on Tuesday, with the blue chip Hang Seng Index falling 1.07 percent. The Hong Kong currency is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85. In the interbank market, short-dated rates remained at low levels because of abundant liquidity in the banking system. The overnight rate was quoted at 0.0001 percent in late afternoon.
Longer-dated interbank rates and interest rate swaps edged higher, taking a cue from a rise in US bond yields overnight. One-year Hibor was fixed at 1.29357 percent on Tuesday morning, up from Monday's 1.22071 percent and has now risen 21.5 basis points since late last week.
Comments
Comments are closed.