George Soros became famous for shorting the British pound during Black Wednesday on September 16, 1992.
The United Kingdom was then part of the European Exchange Rate Mechanism, which required sterling to remain within a permitted range against other European currencies. Market participants believed the pound’s official rate was difficult to defend because of economic conditions and interest-rate pressures. The UK government raised interest rates and intervened, but it ultimately suspended sterling’s ERM membership and devalued the currency.
Soros’s Quantum Fund had taken a large short position against the pound and reportedly earned about $1 billion. That result made him a lasting symbol of the power of macroeconomic hedge-fund trading. Black Wednesday was primarily a currency and monetary-policy crisis, although it also affected financial markets and the reputations of governments and central banks. It should not be confused with the 1997 Asian crisis, which began with pressure on the Thai baht.