HONG KONG (Dow Jones)--The Hong Kong dollar rose against the U.S. dollar for a fourth consecutive session Thursday as strength in domestic equities boosted demand for the local currency.
In late Asian trade, the U.S. dollar was at HK$7.7953, down from HK$7.7965 late Wednesday. The U.S. unit was fixed at HK$7.7953 earlier Thursday.
Traders said most market participants were sitting on the sidelines ahead of U.S. Federal Reserve Chairman Ben Bernanke's speech Friday, leaving the pair in a narrow range. They said they expect the U.S. dollar to trade between HK$7.7930 and HK$7.7970 Friday.
"A firmer performance from Hong Kong equities is drawing demand for the local currency," said a trader at a Singapore bank, adding that some European banks had been spotted selling the U.S. dollar in favor of its Hong Kong counterpart.
The blue chip Hang Seng Index ended 1.5% higher Thursday at 19,752.48, largely supported by overnight gains on Wall Street.
"Bernanke's speech on Friday remains the market focus," a senior trader at a local bank said. "If he announces further quantitative easing measures on Friday, that could push down the pair further next week."
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 388 points to the spot rate, compared with a 406-point discount late Wednesday.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
