HONG KONG: The Hong Kong dollar inched higher against the US dollar on Monday but trading was confined to a narrow range in thin volume. The local cu
rrency traded between 7.7508 and 7.7513 against the US dollar during the session. One dealer said the market lacked clear direction and he expected the spot rate to stick to its recent range of 7.7505-7.7530 in the near term.
Another dealer at a European bank said he had not seen big flows in the spot market, but he expected the local currency could gain some support from a rally in the stock market. The Hong Kong currency is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85.
Local interbank rates fell on Monday. The one-month interbank offered rate was fixed at 1.09929 percent, down from 1.18143 per cent on Friday. The three-month Hibor softened by 3.7 basis points to 1.75143 per cent.
A dealer expected interbank rates to keep a soft tone in anticipation that the Federal Reserve would cut interest rate later this month following Friday's dismal US jobs report for November. The Fed is expected to cut benchmark interest rates by 50 basis points at its policy meeting on December 15-16, according to a Reuters poll. Hong Kong dollar forwards moved in a tight range in quiet trade, dealers said.
