HONG KONG (Dow Jones)--The Hong Kong dollar fell against the U.S. dollar Tuesday, as investors sold the local currency on weakness in domestic equities.
In late Asian trade, the U.S. dollar was at HK$7.7932, up from HK$7.7924 late Monday. The U.S. unit was fixed at HK$7.7917 earlier Tuesday.
Traders said the investors began to focus again on the health of the U.S. economy, after the Institute for Supply Management's purchasing manager's index fell to a two-year low.
They tipped the U.S. dollar to remain a tight range between HK$7.7900 and HK$7.7960 Wednesday.
"I've spotted a Swiss bank and a French bank buying the U.S. dollar at HK$7.7916, with the total size of the purchases about US$50 million," said a senior trader at a local bank.
The blue-chip Hang Seng Index fell 1.1% to 22,421, tracking weakness in regional equity markets.
"The trading volume remains thin as most investors refrained from active bidding until the proposal to raise the U.S. government's borrowing limit and cut spending is formally sealed," the trader added.
The one-year contract was quoted at a discount of 221 points to the spot rate, compared with a 215-point discount late Monday.
-By Chester Yung, Dow Jones Newswires; 852-2832 2331; chester.yung@dowjones.com
