The Hong Kong dollar was trapped in a narrow band against the US dollar in quiet trading with most participants staying on the sidelines for hints of direction from possible fund movements after a rally in the local stock market. "The market was filled with holiday mood and not much activity was noted so far," said a dealer at a local Chinese bank.
"Most players were sidelined for hints from Europe and on any fund movements following a rally in local stocks." Dealers said no capital inflow or outflow was noted so far and expected the local currency to remain trapped between 7.7600 to 7.7700 in the near run. The Hong Kong dollar is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85. Local interbank rates and Hong Kong dollar forwards were little changed in quiet trade. Three-month Hibor was unchanged at 0.13000 percent.