The Hong Kong dollar was a touch softer on Friday, while the discount on local dollar forwards tightened on short-covering ahead of initial public offerings (IPOs).
The currency was trading at 7.7532/34 to the US dollar at 0947 GMT after hitting a one-week low of 7.7536, compared with the previous day's close of 7.7532/33.
Dealers attributed the falls to outright buying and interest rate arbitrage plays.
"There was some short-covering positions in the forwards market, particularly at the front-end, on expectations that interbank rates will rise in the coming two weeks because of the IPOs," said a dealer at a European bank.
The discount on one-month forwards was trading at 40/37 pips, narrowing from Thursday's close of 49/46 pips. The discount on one-year forwards was quoted at 550/540 pips, compared with 565/545 pips the previous day.