The Hong Kong dollar strengthened against the US dollar on Monday as worries about a political crisis in Taiwan faded.
However, analysts said trade in the Hong Kong currency was likely to be cautious in the next few days as players watched developments in the local stock market, fearing a possible outflow of funds as enthusiasm for equities appeared to be waning.
The Hong Kong unit was trading at 7.7957/58 to the US dollar late on Monday, strengthening from 7.7976/77 in late Asian trade on Friday.
"The situation in Taiwan seems to be under control. People are waiting for the recount results," a trader said.