HONG KONG (Dow Jones)--The Hong Kong dollar was higher against the U.S. dollar Friday, though off its day's high amid profit taking.
In late Asian trade, the U.S. dollar was at HK$7.7697, down from HK$7.7739 late Thursday. The U.S. unit was fixed at HK$7.7691 earlier Friday.
The Hong Kong dollar ended the year 2011 with a string of strong sessions, due to robust demand from note-issuing banks. HSBC Holdings PLC, Standard Chartered PLC and BOC Hong Kong (Holdings) Ltd. issue Hong Kong dollar notes.
"I've spotted the note-issuing banks buying the Hong Kong dollar, reflecting their demand for the local unit prior to the Chinese New Year," said a senior trader at a local bank. The Chinese New Year, or Lunar New Year, holidays start on Jan. 23 next year.
Traders expect the local currency to roll back some of the gains at the start of the new year, due to profit taking. They expect the U.S. dollar to trade between HK$7.7680 and HK$7.7730 early next week.
The U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 133 points to the spot rate, compared with a 105-point discount late Thursday.
-By Fiona Law, Dow Jones Newswires; 852-2802-7002; fiona.law@dowjones.com
