Well-known hedge fund investor Bill Ackman said Wednesday that he's making a big bet on the Hong Kong dollar .
Ackman, founder and CEO of the $10 billion hedge fund Pershing Square Capital, is basing the bet on a belief that Hong Kong will allow its currency to appreciate by 30 percent against the U.S. dollar.
The Hong Kong dollar has been pegged to the dollar since 1983. The current statutory exchange rate is between 6.1 and 7.8 Hong Kong dollars to U.S. dollars.
Ackman revealed his latest idea during a keynote presentation at the inaugural CNBC/Institutional Investor Delivering Alpha conference at The Pierre hotel in New York City. (See his full presentation here )
Ackman thinks Hong Kong will change its currency policy sooner rather than later, citing mounting pressures over the continuing weakness in the U.S. economy, rising local inflation concerns, and a coming election for the city-state’s next chief executive in March.
“Based on how Hong Kong historically has responded to similar economic circumstances we believe they will move the peg soon,” Ackman said.
But remarks yesterday from Hong Kong Financial Secretary John Tsang put Ackman's assertion in question.Page 1 of 2 | Next Page