The Hong Kong dollar held steady against the US dollar on Thursday, while most interbank rates softened from the previous session. The local currency traded in a tiny range of 7.7501-7.7504 against the US dollar on Thursday, ending barely changed from late Wednesday trade in Asia.
One dealer said the market lacked clear direction and he had not seen big flows, with some market participants staying on the sidelines ahead of the release of earnings reports from major US banks. J.P. Morgan is due to report results on Thursday and Citigroup on Friday.
Another dealer said the spot exchange rate was likely to trade between 7.7500 and 7.7510 in the near term, with market attention remaining focused on the direction of the local stock market and fund flows. The Hong Kong currency is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85.
Under the currency peg, the Hong Kong Monetary Authority is usually obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85, to keep the band intact. Local interbank rates were mostly softer on Thursday. The one-month rate was quoted at 0.15/0.25 percent in late afternoon, lower than its fixing at a one-and-a-half-month low of 0.27143 percent.