HONG KONG (Dow Jones)--The Hong Kong dollar rose against the U.S. dollar Wednesday, tracking the gains of other Asian currencies as risk appetite was boosted by signs of a euro-zone debt resolution.
In late Asian trade, the U.S. dollar was at HK$7.7884, down from HK$7.7931 late Tuesday. The U.S. unit was fixed at HK$7.7893 earlier Wednesday.
European finance ministers Tuesday approved an EUR8 billion loan tranche for Greece, people familiar with the situation told Dow Jones Newswires Wednesday.
Traders said the local currency is likely to be rangebound in the near term as investors are staying on the sidelines ahead of China's Purchasing Managers Index data, due Thursday.
According to traders at local banks, European and Chinese banks bought the Hong Kong dollar amid bargain hunting.
The local unit's rise Wednesday came despite weakened local stocks, with the benchmark Hang Seng Index falling 1.5% to 17,989.35, dragged by a decline in Chinese shares.
"The U.S. dollar is unlikely to trade above HK$7.7900 in the coming sessions, unless euro-zone debt woes worsen again," a trader at a Chinese bank said.
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 175 points to the spot rate, compared with a 150-point discount late Tuesday.
-By Fiona Law, Dow Jones Newswires; 852-2802-7002; fiona.law@dowjones.com
