Latest Change USD/HKD Spot 7.7734 -0.0028 1-year USD/HKD Forward* -195 +3 Overnight Hibor 0.02% -4 bps 1-month Hibor 0.23% -3 bps 3-month Hibor 0.36% +2 bps 1-year Hibor 0.80% Unchanged 2-year EF Note 0.50% +1 bps 10-year EF Note 2.22% Unchanged *mid-point of bid-offer spread
HONG KONG (Dow Jones)--The Hong Kong dollar rose against the U.S. dollar Friday for the second consecutive session as gains in the local stock market boosted demand for the Hong Kong currency. Traders said the U.S. dollar is likely to gain broad support offshore if the results of stress tests on European banks scheduled to be disclosed late Friday are negative. They said they expect the U.S. dollar to be well-supported at HK7.7700 next week, with psychological resistance at HK$7.7800.
In late Asian trade, the U.S. dollar was at HK$7.7734, down from HK$7.7762 late Thursday. The U.S. unit was fixed at HK$7.7743 earlier Friday.
"With investors not eager to bid ahead of the release of the stress tests on European banks, the rise in Hong Kong equities become the key driver," said a trader at a U.K. bank.
The blue-chip Hang Seng Index rose 1.1% to 20,815.33 following a rally on Wall Street overnight.
European governments have agreed to issue Friday the results of stress tests on 91 banks accounting for 65% of Europe's banking sector in the hope that it will reassure markets worried about their exposure to the continent's debt crisis.
Morgan Stanley currency strategist Calvin Tse said he is bullish on the U.S. dollar in the week ahead because of Federal Reserve Chairman Ben Bernanke's testimony to Congress this week.
"Bernanke's recent characterization of the economy has certainly not helped investor sentiment towards the U.S. The U.S. dollar should benefit as investors flock towards the safety of U.S. dollar-denominated assets," Tse said in a report Friday.
Bernanke said Wednesday in his semiannual monetary policy testimony to the Senate Banking Committee that the U.S. economic outlook is "unusually uncertain."
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 195 points to the spot rate, narrowing slightly from a 198-point discount late Thursday.
Under Hong Kong's currency board system, the Hong Kong dollar is allowed to trade between HK$7.75 and HK$7.85 to the U.S. dollar.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
In late Asian trade, the U.S. dollar was at HK$7.7734, down from HK$7.7762 late Thursday. The U.S. unit was fixed at HK$7.7743 earlier Friday.
"With investors not eager to bid ahead of the release of the stress tests on European banks, the rise in Hong Kong equities become the key driver," said a trader at a U.K. bank.
The blue-chip Hang Seng Index rose 1.1% to 20,815.33 following a rally on Wall Street overnight.
European governments have agreed to issue Friday the results of stress tests on 91 banks accounting for 65% of Europe's banking sector in the hope that it will reassure markets worried about their exposure to the continent's debt crisis.
Morgan Stanley currency strategist Calvin Tse said he is bullish on the U.S. dollar in the week ahead because of Federal Reserve Chairman Ben Bernanke's testimony to Congress this week.
"Bernanke's recent characterization of the economy has certainly not helped investor sentiment towards the U.S. The U.S. dollar should benefit as investors flock towards the safety of U.S. dollar-denominated assets," Tse said in a report Friday.
Bernanke said Wednesday in his semiannual monetary policy testimony to the Senate Banking Committee that the U.S. economic outlook is "unusually uncertain."
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 195 points to the spot rate, narrowing slightly from a 198-point discount late Thursday.
Under Hong Kong's currency board system, the Hong Kong dollar is allowed to trade between HK$7.75 and HK$7.85 to the U.S. dollar.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
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