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Ackman’s Big Hong Kong Short Comes at a Bad Time for Bears

  • Hong Kong dollar has strengthened toward middle of band
  • Options market suggests most traders see further gains
Bill Ackman

Bill Ackman

Photographer: Christopher Goodney/Bloomberg
Updated on

Bill Ackman’s revelation that he’s betting big on a collapse of Hong Kong’s pegged dollar will come across as contrarian to some in the market and mistimed to others.

The city’s multiple interventions to prop up its currency since May have made shorting it unprofitable, sending interbank rates higher than their US equivalents, chilling a once-popular carry trade. That’s helped the local dollar roar back toward the middle of its tight trading band with the greenback, on track for its biggest monthly gain since March 2020. There are few signs of a currency crisis.