The Hong Kong dollar forward discount continued to widen yesterday while the spot rate against the US dollar weakened only slightly after the Hong Kong Monetary Authority returned to the market to buy the greenback. The renewed strength in the Hong Kong dollar has coincided with a sharp drop in the US dollar against all major currencies that gathered speed in European trading on Tuesday. Dealers, however, said the inflow into the Hong Kong market had also been due to investors accumulating Hong Kong dollars to take part in several large equity offerings. As the market was thin, one or two orders could have a noticeable impact on the market, they said. Nevertheless, the HKMA was 'probably a bit concerned about the general US dollar weakness, which is causing the Hong Kong dollar to strengthen a little,' said Tommy Ong, a vice-president of sales, treasury and markets at DBS Bank. He said the de facto central bank did not seem to want the Hong Kong dollar to strengthen beyond HK$7.76 to the US dollar and it appeared to be getting more uneasy about that level the closer it got to New York trading hours, when liquidity became thinner. The last time the local unit strengthened in New York hours, it moved rapidly from HK$7.768 to $7.738 before the HKMA had had a chance to intervene, he said. The HKMA spent HK$621 million in London trading late on Tuesday and a further $109 million before the Hong Kong market opened yesterday to buy US$94 million. It has now bought US$1.52 billion over the past 10 weeks to stem the rise in the Hong Kong dollar. The local unit weakened after the latest intervention, which came after it hit a low of HK$7.7603 against the US dollar late on Tuesday. It was quoted at $7.765 in late Asian trading yesterday. The one-year Hong Kong dollar forwards discount continued to widen, reaching 445 to 435 pips yesterday, compared with 400 to 380 pips a day earlier. The inflow into the Hong Kong dollar was underpinned by a recovery in the economy while renewed speculation about a widening of the yuan trading band added further to the upbeat sentiment. 'I think a lot of players already tried to buy the [US dollar] on dips, but they did not make any money so now there is no [more] interest,' said Leo Au, the chief dealer at Australia's Commonwealth Bank. Mr Au said the Hong Kong dollar would remain at less than $7.80, regardless of the HKMA's efforts to keep it there, as long as there were continued inflows.