HONG KONG (Dow Jones)--The Hong Kong dollar fell against the U.S. dollar Friday as the protracted impasse in the U.S. debt-ceiling negotiations prompted risk aversion.
In late Asian trade, the U.S. dollar was at HK$7.7945, up from HK$7.7923 late Thursday. The U.S. unit was fixed at HK$7.7940 earlier Friday.
Traders said markets remain cautious as the Aug. 2 deadline for the U.S. to raise its debt ceiling nears amid a continued stalemate. They said they expected the U.S. dollar to stay in a tight range between HK$7.7920 and HK$7.7970 Monday.
On Thursday, U.S. House Speaker John Boehner canceled a planned vote on a bill to cut spending and raise the debt limit, instead calling an emergency meeting of House Republicans to discuss their next steps. The delay left the credit status of the U.S. government in jeopardy with five days remaining before it begins running out of money to pay all its bills.
"Markets remain risk averse on the lingering concern over the U.S. debt crisis. I've spotted a Swiss bank buying about US$50 million from the level of HK$7.7930. Yet the trading volume remains thin in general today ahead of month-end," said a senior trader at a local bank.
The one-year U.S. dollar/Hong Kong dollar contract was quoted at a discount of 221 points to the spot rate, compared with a 213-point discount late Thursday.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
