HONG KONG (Dow Jones)--The Hong Kong dollar was steady against the U.S. dollar late Monday, erasing the losses from earlier in the day.
In late Asian trade, the U.S. dollar was at HK$7.7806, a shade down from HK$7.7807 late Friday. The U.S. unit was fixed at HK$7.7799 earlier Monday.
Trading in the Hong Kong dollar will likely be rangebound in the weeks ahead, traders said.
Traders said they expect the Hong Kong dollar to be under pressure as banks squaring positions at the end of the year will provide support to the U.S. dollar. The U.S. unit is likely to trade between HK$7.7750 and HK$7.7850 in the coming sessions.
"I've spotted a major U.K. bank and some local banks buying the U.S. dollar against the local currency" to cover short positions in the U.S. dollar, said a senior trader at a local bank.
The senior trader said there was profit-taking in the U.S. dollar when the greenback strengthened.
Transactions are thin in the market as banks tend not to take new positions ahead of the year-end holiday season, traders said.
The one-year U.S. dollar/Hong Kong dollar contract was quoted at a discount of 135 points to the spot rate, compared with a 140-point discount late Friday.
-By Fiona Law, Dow Jones Newswires; 852-2802-7002; fiona.law@dowjones.com
