HONG KONG (Dow Jones)--The Hong Kong dollar fell against the U.S. dollar Thursday as the local currency's recent strength triggered profit-taking ahead of the Lunar New Year holiday.
In late Asian trade, the U.S. dollar was at HK$7.7641, up from HK$7.7627 late Wednesday. The U.S. unit was fixed at HK$7.7638 early Thursday.
Traders said the Hong Kong dollar will likely remain rangebound within a HK$7.7600 to HK$7.7700 band in the near term.
"The city's currency could receive some support next week if China cuts its (reserve requirement ratio) and signals a looser monetary policy ahead. The move will boost investors' confidence towards local shares," said a senior trader at a local bank.
Hong Kong markets will be closed from Monday to Wednesday for the Lunar New Year celebrations, while China will be closed for an entire week.
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 48 points to the spot rate, compared with a 19-point discount late Wednesday.
-By Fiona Law, Dow Jones Newswires; 852-2802-7002; fiona.law@dowjones.com
