Global Macro Trading Strategies

The term global macro is used to describe a trading strategy used by various hedge funds. Hedge Funds using the global macro strategy take positions in on the basis of macroeconomic forecasts and analysis in a global context. Global macro analysis covers areas such as interest rates, government policies and inter-government relations.

An example of a global macro strategy is George Soros‘ famous shorting of the pound sterling in 1992. Soros took a massive short position of over $10 billion worth of pounds, consequently profiting from the Bank of England’s reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float the currency. Soros made 1.1 billion on the trade and was dubbed “the man who broke the Bank of England.”