The Hong Kong dollar was firm but off its highs late on Thursday and discounts on forwards widened in choppy trade, amid speculation that players were positioning themselves to buy Hong Kong government bonds.
"I heard that some people were selling US dollars for Hong Kong dollars in order to buy longer-dated Hong Kong dollar government bonds," another trader from a European bank said.
The local currency hit a one-week high of 7.7981 per US dollar in early afternoon business from a midday close of 7.7996, but then quickly pulled back to the 7.7990 level. It was trading at 7.7994/95, firmer than 7.7998/99 in late Asian trade on Wednesday.
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