HONG KONG (Dow Jones)--The Hong Kong dollar rose against the U.S. dollar Friday as a continued rise in local stocks attracted capital inflows.
In late Asian trade, the U.S. dollar was at HK$7.7584, down from HK$7.7594 late Thursday. The U.S. unit was fixed at HK$7.7580 earlier Friday.
Traders said the recent strength of domestic equities continued to boost demand for the local currency, keeping the U.S. dollar under pressure. They expect the U.S. dollar to trade between HK$7.7550 and HK$7.7600 over the weekend.
"It seems that some foreign firms are parking their funds in the city state, looking for investment opportunities in the new year. Selling pressure in the greenback may be sustained over the near term," said a senior trader at a U.S. bank.
The blue-chip Hang Seng Index rose 0.31% to 20,501.67, extending Thursday's 1.6% gain, amid an improved U.S. economic outlook, and following the U.S. Federal Reserve's pledge to keep rates low for an extended period.
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 63 points to the spot rate, widening from a 55-point discount late Thursday.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
