PointState Said to Bet Against Saudi Riyal After Oil Short
- Wagner's Knighthead also among hedge funds shorting currency
- `You have a small probability of a big event,' says strategist
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As slumping oil prices squeeze Saudi Arabia’s finances, a few big hedge funds are wagering that the kingdom will be forced to abandon a three-decade-old currency peg that has been a bulwark of its economic and financial stability.
Among them is Zach Schreiber’s PointState Capital, a firm backed by billionaire Stan Druckenmiller that made a $1 billion profit in 2014 betting that oil would fall, according to people familiar with the matter. Knighthead Capital Management, the event-driven hedge fund co-founded by Tom Wagner, has also joined the trade, said the people, who asked not to be identified because the information is private.