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  • Jan 1st, 2005
  • Comments Off on Hong Kong dollar inches higher, tracking firmer yen
The Hong Kong dollar edged higher on the last trading day of the year on Friday, taking a lead from a firmer yen against the ailing US dollar, dealers said. The local currency was trading at 7.7745/50 per US dollar, up from 7.7769/70 in late Asian trade on Thursday.

Traders said the local currency was likely to remain firm in 2005 due to US dollar weakness, persistent speculation about a yuan revaluation and more stock offerings by major Chinese companies in Hong Kong, which should attract foreign investment flows to the city.

PricewaterhouseCoopers said on Thursday Hong Kong initial public offerings (IPOs) are set to raise a record HK$138 billion (US $17.7 billion) in 2005.

"The Hong Kong dollar rose along with other Asian currencies. Next year, I believe the market will continue to speculate on the yuan and focus on the US dollar's trend," said a dealer from a Japanese bank.

The US dollar has been under pressure on the back of a record US current account deficit, and looks set to fall further in the new year.

A weak greenback, to which the Hong Kong dollar is pegged, could help to improve Hong Kong's competitiveness.

Copyright Reuters, 2005


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