Definition – What does Black Wednesday mean?
Black Wednesday is a slang term for September 16th, 1992. This is the day George Soros broke the Bank of England. The trade earned Soros over $1 billion and still stands as the greatest forex trade ever made. Black Wednesday halted the hastily planned unification of the European economies.
ForexTerms explains Black Wednesday
Prior to 1990, the British pound had been kept separate from the European Exchange Rate Mechanism that was intended to smooth trade in Europe. Upon joining the ERM the pound became one of the de facto benchmark currencies along with the Deutsche mark. Currency speculators like George Soros spotted the weak link in the ERM and shorted the pound – Soros alone shorted more than 10 billion dollars worth. The British government was finally forced to withdraw the pound from the ERM.
