Hedge funds burned as Hong Kong dollar bets implode
However, market participants still seem satisfied with the HKMA’s commitment to defending currency peg
Global trade tensions have turned the normally benign Hong Kong dollar into a treacherous currency to trade, with wild spot moves forcing hedge funds to unwind leveraged positions that were widely seen as relatively safe bets.
“There were a lot of carry-type positions and people playing the range in that currency [HKD] that I think have been forced to reduce as a function of just general risk management,” says the head of FX at a global bank.
HKD has been pegged to USD in a range of 7.75 to 7.85
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