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Saturday, June 27, 2009

(AFX UK Focus) 2009-06-26 05:02 HK dollar stays at top of band despite HKMA intervention

HONG KONG, June 26 (Reuters) - The following is a snapshot of the Hong Kong foreign exchange and money markets in morning trade on Friday.
Morning Previous close
At 0245 GMT At 0900 GMT


HK$ SPOT 7.7500/01 7.7500/01

FORWARDS


Three-month -56/-54 -58/-53
Six-month -104/-99 -108/-103
One-year -174/-164 -178/-168

INTERBANK RATES (PERCENTAGE)


Overnight 0.01/0.11 0.0001
One-month 0.02/0.21 0.10/0.15
Three-month 0.11/0.23 0.25/0.35
Six-month 0.35/0.47 0.55/0.68
One-year 0.59/0.71 1.00/1.15

  • FOR MORE LIVE QUOTES OF FORWARDS AND INTERBANK RATES, CLICK on.

  • THE HONG KONG DOLLAR REMAINED AT THE TOP OF ITS TRADING band against the U.S. dollar on Friday morning, despite overnight inervention by the Hong Kong Monetary Authority (HKMA), as the territory continued to attract fund flows.

  • THAT WAS UNDERSCORED BY STRONG DEMAND FOR CHINESE HERBAL shampoo maker BaWang International's IPO, which on Friday was priced at the top of its indicative range after being more than 400 times oversubscribed at the retail level and more than 40 times at the institutional level, dealers said.

  • THE HONG KONG DOLLAR WAS QUOTED AT 7.7500/01 TO THE U.S. dollar by midmorning. Dealers said the HKMA might have to intervene on Friday to keep the Hong Kong currency's trading band intact.

  • THE HONG KONG CURRENCY IS PEGGED AT 7.80 TO THE U.S. dollar but can trade between 7.75 and 7.85. Under the currency peg, the HKMA is usually obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85, to keep the band intact.

  • THE HKMA SOLD HK$2.713 BILLION (US$350 MILLION) IN THE money market in New York trade on Thursday to stem the currency's appreciation. On Wednesday it injected HK$3.875 billion to keep the trading band intact.

  • HONG KONG IS DRAWING FUND FLOWS AMID SIGNS THAT CHINA'S economy is improving and will help the rest of Asia pull out of a slump. Until they see an improvement in the economies of the U.S. and Europe, investors will continue to keep their funds in Asia, one dealer said.

  • LOCAL INTERBANK RATES MOSTLY FELL ON FRIDAY MORNING, tracking a drop in U.S. rates after a jump in U.S. Treasuries. The U.S. Federal Reserve added to expectations it will not raise rates anytime soon when it announced on Thursday that it would extend a number of emergency funding facilities.

    Three-month Hibor dipped to 0.11/0.23 percent by midmorning from 0.25/0.35 percent late on Thursday.

    The overnight Hibor, however, edged up to 0.01/0.11 percent from 0.0001 late on Thursday as demand for the BaWang IPO continued to squeeze liquidity, dealers said.

  • THE DISCOUNT ON HONG KONG DOLLAR FORWARDS WAS LITTLE changed.
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