Dollar edges up on risk appetite improved by Hong Kong shares

©Kyodo News

The U.S. dollar edged up in the lower 109 yen range Tuesday in Tokyo as traders' risk appetite was boosted by a rebound in Hong Kong stocks following a selloff the previous day, as violence escalated in the Asian financial hub.

At 5 p.m., the dollar fetched 109.23-24 yen compared with 109.00-10 yen in London at 4 p.m. and 108.95-97 yen in Tokyo at 5 p.m. Monday. It moved between 108.99 yen and 109.29 yen during the day, changing hands most frequently at 109.14 yen. The currency market was closed in New York on Monday for the Veterans Day national holiday.

The euro was quoted at $1.1028-1029 and 120.46-50 yen against $1.1030-1040 and 120.35-40 yen in London and $1.1029-1031 and 120.16-20 yen in Tokyo late Monday afternoon.

After hovering in the lower 109 yen range, the dollar inched up in the afternoon after Hong Kong shares moved into positive territory and widened gains, which provided some relief to market participants, dealers said.

Many market players were reassured by a rebound in Hong Kong shares, thinking they do not have to worry so much about the negative impact on the city's business activities from the political unrest, said Yukio Ishizuki, a senior foreign exchange strategist at Daiwa Securities Co.

Traders had been concerned after a protester was shot and seriously injured by police in central Hong Kong on Monday.

The U.S. currency also drew support against the safe-haven yen after the Brexit Party said it will not contest the 317 seats held by the Conservative Party in Britain's Dec. 12 general election, increasing the chances for Prime Minister Boris Johnson's ruling party to win a majority in the poll.

"If Mr. Johnson's party wins, a Brexit deal that he reached with the European Union is expected to be passed in the parliament, finally settling" the issue of the United Kingdom's departure from the European Union, Ishizuki said.

Traders are now looking to a speech by U.S. President Donald Trump at the New York Economic Club later in the day for fresh hints about trade talks with China, the dealers said.