HONG KONG (Dow Jones)--The Hong Kong dollar rose against the U.S. dollar Friday supported by a rally in the local stock market, but corporate demand for the greenback capped upside in the local unit.
In late Asian trade, the U.S. dollar was at HK$7.7788, down from HK$7.7798 late Thursday. The U.S. unit was fixed at HK$7.7808 earlier Friday.
A local trader at a UK-based bank said trading of the U.S. dollar/Hong Kong dollar was kept to a tight range as volume was thin ahead of the Christmas holidays. "I don't expect the pair will move too much from its current level as most investors are already on holiday," he said, tipping a 7.7770-7.7800 range until the year end.
At 0725 GMT, the blue-chip Hang Seng Index was up 1.1% at 18,588.41.
A senior trader at a local bank said corporate demand for the U.S. dollar limited the Hong Kong dollar's rise. "I expect the (greenback) to retain an upward bias after the Christmas holiday due to lingering concerns over the euro-zone debt crisis.
The U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 100 points to the spot rate, compared with a 123-point discount late Thursday.
-By Susanna Tai, Dow Jones Newswires; 852 2832 2338; susanna.tai@dowjones.com
