The following is a snapshot of the Hong Kong foreign exchange and money markets on Wednesday.

Morning Previous Close

At 0319 GMT At 0903 GMT

HK$ SPOT 7.7550/53 7.7555/56

FORWARDS

Three-month -82/-72 -80/-70

Six-month -150/-140 -148/-138

One-year -260/-240 -255/-225

INTERBANK RATES (PERCENTAGE)

Overnight 0.75/1.00 0.60/0.80

One-month 2.65/2.90 2.90/3.10

Three-month 2.90/3.15 3.10/3.35

Six-month 2.85/3.10 3.05/3.30

One-year 2.80/3.05 2.95/3.20

* The Hong Kong dollar was marginally stronger against the U.S. currency on Wednesday, while local interbank interest rates continued to track U.S. dollar interbank rates lower.

* The local currency traded between 7.7535 and 7.7560 during the session.

One dealer said there was some unwinding of long U.S. dollar positions, partly due to short-dated money remaining tight. He added that the overnight and tomorrow/next Hong Kong dollar forwards stayed at a slight premium, implying the carry cost to hold the U.S. dollar was not favourable.

* The Hong Kong currency is pegged at 7.8 to the U.S. dollar but can trade between 7.75 and 7.85.

* Local interbank rates fell on Wednesday as credit strains were easing.

The one-month Hong Kong interbank offered rate was fixed at 2.89786 percent at 0315 GMT, its lowest since Sept. 17, and was down 22 basis points from Tuesday.

The three-month Hibor fell 21 basis points to 3.14250 percent and has now dropped 105 basis points this week.

* U.S. dollar funding cost eased in Asia on Wednesday

* The discount on longer-dated Hong Kong dollar forwards widened after some outright selling in early trade, said a dealer at a European bank.

Source: http://www.afxnews.com

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