The Hong Kong dollar recouped early losses to end higher on Monday despite weakness in the stock market. The currency was trading at 7.8122/23 against the US dollar, off a morning low of 7.8152 and stronger than the 7.8137/40 it stood at in late Friday trade in Asia.
"IPOs have attracted investment flows into the city and boosted demand for Hong Kong dollars," one trader said. The local currency is pegged at 7.80 to the US dollar, but can trade between 7.75 and 7.85.
Some dealers said they had not seen any big capital outflow even after a sell-off in the domestic stock market. Hong Kong stocks fell on Monday, halting a six-session rising streak, as investors booked profits following sharp drops in mainland stock markets.
In the interbank market, short-term rates traded softer in the morning session but the one-week to one-month rates rebounded slightly in the afternoon as a spate of IPOs in the market spurred demand for funds.
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