HONG KONG (Dow Jones)--The Hong Kong dollar rose against the U.S. dollar Thursday, supported by the fourth-straight day of gains on the local stock market.
In late Asian trade, the U.S. dollar was at HK$7.7840, down from HK$7.7959 late Wednesday. The U.S. unit was fixed at HK$7.7823 earlier Thursday.
Traders said expectations the U.S. Federal Reserve would announce further stimulus measures during its next meeting Sept. 20-21 provided support to the local stock market. They said they expected the U.S. unit to trade between HK$7.7825 and HK$7.7900 Friday.
"The strong showing in the local stock market is lending support to the local currency, but I believe the U.S. dollar/Hong Kong dollar pair has bottomed out from its earlier trough of 7.7825 today," said a trader at a U.K.-based bank.
At 0735 GMT, the blue-chip Hang Seng Index was up 0.5% at 20,628.25, extending the index's 4.9% gain over the past three sessions.
A senior trader at a local bank said a major U.K. bank sold the U.S. dollar in New York trade overnight. "News about two companies aiming to raise a total of up to $5 billion via IPOs in Hong Kong in coming months also boosted demand for the local currency," the trader said.
Jewelry retailer Chow Tai Fook Jewellery Co. plans to raise $3 billion-$4 billion and Beijing-based Guodian Technology & Environment Group plans to raise around $1 billion in the fourth quarter, people familiar with the situation said Wednesday.
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 333 points to the spot rate, compared with a 348-point discount late Wednesday.
