Hedge funds burned as Hong Kong dollar bets implode
Carry trades and call spreads unwound after Trump tariffs pushed spot to edge of 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.
The Hong Kong dollar has been pegged to the US dollar
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@fx-markets.com or view our subscription options here: https://subscriptions.fx-markets.com
You are currently unable to print this content. Please contact info@fx-markets.com to find out more.
You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@fx-markets.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@fx-markets.com
More on Trading
Ex-Citi banker’s ‘perfect marriage’ with Franklin’s crypto unit
Investment giant throws weight behind Chris Perkins’ plan for investing in digital markets
JP Morgan’s great comeback reshapes FX Markets’ Dealer Rankings
Wall Street giant takes top spot in forwards and rises to second in options as US rivals gain share
Alphabet, Micron ramp up FX hedging
Tech pair leads FX derivatives surge in year to Q2, while notionals at Apple and Johnson & Johnson decline
Traders remain on alert as Kospi-KRW decoupling wanes
Negative equity-FX correlation normalises as vol subsides, but funds poised for future opportunities
Podcast: Alexander Barzykin on modelling FX market-making
HSBC quant discusses adverse selection, price reading and internal liquidity management
Futures venues eye growth in BRL trading with Asian investors
CME and SGX see ramp-up in out-of-hours demand for lucrative carry trade
Wells Fargo’s Apac macro head leaves for Dymon Asia
Asian multi-strat fund has been hiring from rivals as it expands globally
Perps extend the menu to tempt TradFi diners
Expiry-less futures are spreading from bitcoin into gold, equities and FX. Institutions are watching, not buying
