The Hong Kong dollar edged higher against the US dollar on Friday, underpinned by a rally in the stock market and signs of fund inflows for upcoming IPOs, dealers said. The local currency firmed to 7.7505 in late afternoon, near the upper end of its tight band to the US dollar.
Hong Kong's Hang Seng Index was up 2.82 percent on Friday, posting its biggest single-day gain in six weeks, after China increased the limit for stock investments by foreign funds to $1 billion in a show of support for the market. The HKD is pegged at 7.80 to the USD but can trade between 7.75 and 7.85. Local interbank rates traded narrowly. The two-week and one-month rates nudged higher on IPO-related fund demand, dealers said.