HONG KONG (Dow Jones)--The Hong Kong dollar fell slightly against the U.S. dollar Wednesday as some foreign banks bought the safe-haven greenback due to a bout of risk aversion.
The U.S. dollar was at HK$7.7938 in late Asian trade, slightly higher than HK$7.7930 late Tuesday. The U.S. unit was fixed at HK$7.7940 earlier Wednesday.
Currency dealers said they don't expect a significant fall in the domestic currency as upcoming initial public offerings will draw local dollar demand. They said they expect the U.S. dollar to trade at HK$7.7900 to HK$7.7960 Thursday.
"A Japanese bank and a U.K. bank bought about US$50 million in total at HK$7.7930, pushing up the Hong Kong dollar during a relatively quiet trading session," said a senior dealer at a local bank, attributing the purchases to a decline in risk sentiment. "Still, I see a strong resistance at HK$7.7950 where some local banks will take profits."
The dealer also said upcoming IPOs will lend support to the local dollar. Chow Tai Fook Jewellery Co., controlled by billionaire Cheng Yu-tung, and Guodian Technology and Environment Group Co. aim to raise a total of US$5 billion when they list on the Hong Kong stock exchange in the fourth quarter, people familiar with the matter told Dow Jones Newswires last week.
The one-year U.S. dollar/Hong Kong dollar forwards contract was quoted at a discount of 345 points to the spot rate, compared with a 383-point discount late Tuesday.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
