Hedge funds burned as Hong Kong dollar bets implode

- By Lukas Becker, Joe Parsons and Chris Davis
- 12 May 2025

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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

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