The Hong Kong dollar barely moved on Thursday, trapped in a range between 7.7544 and 7.7552 to the US dollar with thin activity ahead of the New Year's Day holiday. "It's pretty much rangebound on the last trading day of the year. I think there was only position squaring," a dealer said.
"Next year, the market will be focused on how and when central banks wind down the extraordinary monetary easing." A second dealer said the USD/HKD spot rate was likely to head higher next year, as a strengthening US dollar fuelled speculation that the Federal Reserve may raise rates in 2010.
He projected the Hong Kong dollar to trade in a range between 7.7520 and 7.7620 in the first quarter of 2010. Hong Kong tracks US interest rate cycles because of its currency peg to the US dollar. However, the Hong Kong dollar has weakened in recent weeks, touching a more than nine-month low of 7.7585 on December 18, amid a rebound in the US dollar on global markets, a correction in the stock market and year-end corporate buying of the US currency.
Comments
Comments are closed.