HONG KONG (Dow Jones)--The Hong Kong dollar fell against the U.S. dollar Monday as disappointing U.S. jobs data and the weaker local equities market boosted demand for the safe-haven U.S. currency.
In late Asian trade, the U.S. dollar was at HK$7.7836, up from HK$7.7813 late Friday. The U.S. unit was fixed at HK$7.7827 earlier Monday.
Traders said the lingering worries over contagion from the debt crisis in Europe will lend support to the greenback. They said they expect the U.S. dollar to trade between HK$7.7820 and HK$7.7870 Tuesday.
The U.S. government said Friday that nonfarm payrolls rose 18,000 last month, which is weaker than expected. Separately, it said the jobless rate increased for a third straight month to 9.2% in June, the highest since December 2010. In May, the unemployment rate was 9.1%.
"I've spotted a major Chinese bank buying about US$80 million at HK$7.7829 amid the reduced risk sentiment. A major U.K. bank was also spotted buying about US$50 million," said a senior trader a local bank.
Another trader at a local bank said the weaker local stocks also prompted investors to offload the Hong Kong dollar. "Still, I haven't spotted any major capital outflows yet," the trader added.
At 0728 GMT, the blue-chip Hang Seng Index was down 1.7% at 22,336 after stocks on Wall Street fell Friday and amid concerns over further tightening in China following the release of June inflation data.
China's consumer price index rose 6.4% in June from a year earlier, accelerating to its fastest pace in three years, data from the National Bureau of Statistics showed Saturday.
The one-year U.S. dollar/Hong Kong dollar forward contract was quoted at a discount of 202 points to the spot rate, compared with a 203-point discount late Friday.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
