Latest Change
USD/HKD Spot 7.7849 +0.0037
1-year USD/HKD Forward* -218 +2
Overnight Hibor 0.05% -1 bp
1-month Hibor 0.06% -6 bps
3-month Hibor 0.20% -6 bps
1-year Hibor 0.72% +5 bps
2-year EF Note 0.24% +1 bp
10-year EF Note 1.24% -5 bps
*mid-point of bid-offer spread

The Hong Kong dollar fell against the U.S. dollar Wednesday due to continued worries over the euro-zone debt situation, which sent investors out of the Hong Kong stock market and into the safety of the greenback.

In late Asian trade, the U.S. dollar is at HK$7.7849, up from HK$7.7812 late Tuesday. The U.S. unit was fixed at HK$7.7850 earlier Wednesday.

Traders said they believe risk aversion will further hurt the local currency, and they expect the U.S. dollar to be trade between HK$7.7820 and HK$7.7880 in the near term.

The Hong Kong stock market was lower for a second day following weakness in European stocks a day earlier, with worries over the euro area reignited as new Greek leader Antonis Samaras said he would not sign the written pledge demanded by European Union officials. Talks on private-sector involvement in the second rescue package for Greece have begun, but this written pledge needs to be signed in order for Greece to received its next tranche of aid.

The local benchmark Hang Seng Index ended down 2.0% at 18,960.90.

"Liquidity (for the Hong Kong dollar) is tight, exaggerating the fall of the Hong Kong unit against the greenback," said a trader at a U.K. bank, adding Bank of America Corp's demand for the U.S. dollar may put more downward pressure on the local currency.

The U.S. lender said Monday it was selling cutting its stake in China Construction Bank Corp. to 1.0% from 5.0%, which will generate an after-tax gain of $1.8 billion.

The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a 218-point discount to the spot rate, compared to a 220-point discount late Tuesday.

Source:chinesestock