According to Bloomberg, "The Hong Kong Monetary Authority said it bought $603 million at HK$7.75 per dollar, which is the so-called strong side of the permitted convertibility range of HK$7.75 to HK$7.85 that obligates intervention."
This was the first time in three years that Hong Kong has formally stepped into the currency markets.
As I've written previously, the Hong Kong dollar is formally pegged to the U.S. dollar. Speculators like Bill Ackman are betting that the peg does not make sense anymore.
"First of all, it must be understood that the Hong Kong dollar has been pegged to the U.S. dollar for the last 27 years. Monetary policy is dictated by Ben Bernanke in Washington. As Bernanke pledge QE infinity, surely the Hong Kong monetary authorities are debating the peg.
Hong Kong is one of the world's strongest economies. The country is growing at 6 percent annually and the unemployment rate is only 3 percent. However, Hong Kong has a weak currency that is equipped for an emerging market economy. However, the Hong Kong dollar is stuck at 12.9 cents," he said.
In November 2011, Ackman disclosed that he had purchased call options on the Hong Kong dollar and he was expecting that the currency band would be revised.
Hong Kong officials quickly acknowledged Ackman's bet. City Chief Executive Donald Tsang said, “I think he’s going to lose a lot of money on that.” He called the peg a “very important anchor underpinning Hong Kong growth and Hong Kong’s monetary stability and we are not going to change.”