Yesterday media reports had it that Hungarian-American billionaire George Soros was shorting the Australian dollar ahead of the Reserve Bank’s rates announcement.
Now, according to Mark Hawthorne at Fairfax, it looks like it could have paid off. After the RBA slashed the cash rate to a record low of 2.75 per cent, it appears Soros could have cleaned up a tidy $18.65 million profit in 36 hours.
As if that wasn’t enough. Assuming the rumour is correct, it has also been reported he pulled off his currency punt three times, each with difference foreign exchange brokers in Asia, for a tidy profit of almost $US60 million.
Fairfax believes that a $1 billion short order for Australian currency was placed through a major FX broker in Hong Kong on Monday, with a settlement date set for just after the RBA announcement.
Traders told Hawthorn they were aware of the big short play yesterday, and the Australian dollar slipped lower as the news spread.
One Melbourne-based FX broker told Business Insider this morning he was aware of the rumour, but only through media reports. Despite that, he wasn’t surprised someone with a lot of capital would make a play on the dollar ahead of the announcement – only that the news got out.
“There’s always confidentiality agreements between brokers and clients,” the he said, adding that “traders live for moments like this,” where a lot of money can be made off the back of a surprise central bank decision.
“It [the rumour] certainly didn’t come from him.”
Recently Soros’ obituary was prematurely released by Reuters. Among the phrases used to personify the 82-year-old mega-investor were “predatory,” and “hugely successful.”
He is known as “the man who broke the Bank of England” for shorting the British Pound in 1992, and has been accused of helping to trigger the Asian financial crisis in 1997 by short-selling the Thai Baht and the Malaysian Ringgit.
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