By Rishav Chatterjee
February 8 (Reuters) – Short bets on most Asian currencies eased marginally but remained firmly in bearish territory, a Reuters poll found on Thursday, as fading hopes of an early US interest rate cut kept the dollar afloat and market volatility in regional power China dampened investor confidence.
Bearish bets on the South Korean win KRW=KFTCIndonesian rupiah IDR= and the Taiwanese dollar TWD= ticked lower, while those on the Chinese yuan CNY=CFXS and Singapore dollar SGD=edge higheraccording to a biweekly poll of 10 respondents.
The US dollar =USDwhich measures itself against a basket of currencies, jumped to a nearly three-month high this a week when investors cut bets that the Federal Reserve will begin cutting interest rates as early as March. FEDWATCHUS DOLLAR/
“The US Federal Reserve appears to be in no rush to cut rates, disappointing markets, but given the recent rally, it would take some adverse developments for the Fed to move quickly,” DBS analysts said.
Robust economic data from the US, including those closely watched jobs reportwhich exceeded market expectations, reinforced the view that a rate cut in March was highly unlikely.
Meanwhile, a flurry of disappointing economic data from Asia’s largest economy China, such as inflation, services and manufacturing activity, along with volatility in equities, kept analysts firm on their bearish views on the region’s currencies.
Short bets on the yuan now stand at their highest level since mid-November last year.
“Sentiment around the Chinese yuan is more likely to depend on any new policy announcements aimed at supporting Chinese stock markets ahead of Lunar New Year,” said Wei Liang Chang, FX & credit strategist at DBS Group.
Short positions on the Thai baht THB= and Philippine peso PHP= relieved too.
The central bank of Thailand saved the country’s key interest rate unchanged on Wednesday, defying government pressures to reduce borrowing. costs to revive faltering growth.
“While acknowledging the downside risks to the outlook, we continue to expect the Bank of Thailand to keep its policy rate stable throughout 2024,” wrote Aris Dacanay, an analyst at HSBC in a note.
Meanwhile, the Indian rupee INR=IN was the outlier among the pack, with investors maintaining their bullish views on the currency, which has outperformed its peers so far this year.
“Recently, INR has seen some acceleration in global fund buying and an improvement in the trade deficit,” analysts at Maybank wrote.
The Indian rupee has gained 0.3% so far this year, the only currency in the region in positive territory.
“Our medium-term INR view remains largely positive as we see growth and inflation dynamics continuing to be supportive for the INR,” Maybank added.
The Asian currency positioning survey focuses on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee , Philippine peso, Malaysian. ringgit and the Thai baht.
The survey uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates that the market is significantly long US dollars.
The figures include positions held by non-deliverable forwards (NDFs).
The survey results ASIAPOSN are provided below (US dollar positions against each currency):
DATE
USD/CNY
USD/KRW
USD/SGD
USD/IDR
USD/TWD
USD/INR
USD/MYR
USD/PHP
USD/THB
8-Feb-24
0.4
0.39
0.41
0.4
0.32
-0.17
1.07
0.28
0.72
25-Jan-24
0.37
0.9
0.28
0.51
0.49
-0.18
1.07
0.5
0.9
11-Jan-24
0.18
0.3
0.02
0.19
0.05
-0.15
0.72
0.09
0.03
14-Dec-23
0.02
-0.09
-0.22
-0.05
-0.33
0.34
0.58
-0.22
0.16
30-Nov-23
0.12
-0.05
-0.07
-0.05
-0.13
0.63
0.73
-0.1
-0.1
16-Nov-23
0.77
0.49
0.38
0.77
0.63
0.82
1.14
0.38
0.28
2-Nov-23
1.32
1.18
0.74
1.44
1.31
1.35
1.33
0.96
0.85
19-Oct-23
1.02
1.16
0.84
1.06
1.06
1.21
0.78
0.89
0.67
5-Oct-23
1.17
1.25
0.81
1
1.25
0.92
1.08
0.75
1.03
Survey: Asia’s emerging market currencies
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Eileen Soreng)
((Rishav.Chatterjee@thomsonreuters.com;))
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