The Hong Kong dollar was range-bound on Friday with profit-taking in the wake of China's rate rise offset by fresh buying on speculation of new fund inflows to the territory.
"There was some profit taking. After the rate hikes in China some people expect its economy to cool. That will reduce pressure for a yuan revaluation," said a dealer from a Japanese bank.
However, some players believe there is now a greater likelihood of a yuan revaluation in the near future.
"It's the first rate hike in 9 years in China. Speculators think there may be further rises or other monetary measures such as changes in the yuan exchange rate and people are saying that further funds will flow into Hong Kong," said another dealer at a local bank.
After shuffling between 7.7770 and 7.7812 on Friday, the local currency traded at 7.7794/95 compared with 7.7765/66 in late Asian trade on Thursday.
It is often seen as a proxy for the Chinese yuan as the two economies become more closely integrated.