The Hong Kong dollar nudged higher against the US dollar on Friday helped by a rally in the citys stock market. The local currency rose about 0.01 percent from late Thursday trade in Asia, having earlier hit a session high of 7.7533 against the US dollar.
Some dealers said sentiment improved on signs that the stock market was stabilising, with one dealer expecting the USD/HKD spot rate to hover in a range of 7.7520 and 7.7550 in the near term. Hong Kong shares jumped 4.4 percent in its fourth day of gains on Friday, leading the main index to its best weekly rise in a month and a half, with China stocks outperforming as investors continued to cheer hints of economic recovery in the mainland.
The Hong Kong currency is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85. Local interbank rates dropped on Friday following a modest fall in US rates overnight and as a major lender had offered to lend short-dated money.
The overnight interbank rate was quoted at 0.0001 percent late in the afternoon, softer than 0.0005 percent in the morning. The one-month Hibor was fixed at 0.33000 percent on Friday morning, down from 0.34929 percent on Thursday. It was quoted at 0.20/0.30 percent in late afternoon on Friday. The three-month Hibor was fixed at 0.93286 percent, compared with 0.95143 percent on Thursday. Hong Kong dollar forwards were little changed in quiet trade, dealers said.