The Hong Kong dollar edged higher on Wednesday but trading kept to a narrow range as market attention was fixed on short-dated interbank rates. The currency was trading at 7.8125/28 against the US dollar, having touched a one-week high of 7.8112, stronger than 7.8133/35 in late Tuesday trade in Asia.
"Bullish sentiment in the stock market and higher short-term interbank rates on IPO-related funds demand have provided support for the local currency," one trader said. The Hong Kong dollar is pegged at 7.80 to the US dollar, but can trade between 7.75 and 7.85. Hong Kong stocks extended gains on Wednesday and finished at a record close. The blue chip Hang Seng Index ended 0.3 percent higher while the China Enterprise index of H shares rose 0.55 percent.