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
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