The Hong Kong dollar ended little changed on Tuesday with trading confined to a narrow range, while forward discount narrowed in quiet trade.
The local currency was trading at 7.7539/41 per US dollar after moving in a tiny eight-pip range throughout the day, compared with 7.7543/44 in late Asian trade on Monday.
Some traders said the local currency was likely to retain a firm bias, given that a number of IPOs were in the pipeline before the year end. They expected the USD/HKD spot rate to remain range trading between 7.7530 and 7.7560 in the near term.
Discounts on Hong Kong dollar forwards narrowed slightly amid some buying interest in the one- and two-month contracts, one dealer said.
The discount on one-month forwards tightened to 14/11 pips from Monday's close of 16/14 pips. Meanwhile, one-year forwards narrowed to a discount of 175/160 pips versus 190/170 pips.
Dealers said trading was very thin with the coming of the year-end.