POLL-Bears raise shorts on most Asian currencies

Credit: REUTERS/THOMAS WHITE

By John Biju and Archishma Iyer

March 21 (Reuters) - Bearish bets on most emerging Asian currencies continued to rise in March, with short positions on the South Korean won and Taiwan dollar strengthening the most, while long positions on the Indian rupee stayed firm, a Reuters poll showed on Thursday.

Short positions in the South Korean won KRW=KFTC and the Taiwan dollar TWD=TP jumped sharply to their highest since early November, according to the poll of 11 analysts.

All responses came in before the Federal Reserve's decision on Wednesday to stay pat on interest rates while holding the projection of three rate this year, even as it hiked its economic outlook in a slightly hawkish bias. Investors expect central banks in Asia to also loosen policy this year, in lockstep with the Fed.

"Some of these tech-linked currencies may have broken down, largely because of the fear that whether the U.S. rates could still stay here for longer," Christopher Wong, a currency strategist with OCBC said.

"I think this situation could continue until we get better clarity that there are going to be rate cuts, then we should perhaps see some recovery in the Asian currencies, including the Taiwan dollar," he added.

Bearish bets on other Asian currencies such as the Chinese yuan CNY=CFXS, Singapore dollar SGD= and the Thailand baht THB=TH strengthened, with the short positions on the baht rising to their highest since early November 2022.

Short positions on the Indonesian rupiah IDR= reached their highest since mid-November last year.

Meanwhile, the Indian rupee INR=IN, which is the only positively performing currency in the region this year, has been an analyst favourite and an outlier since the start of the year, as long positions continue to strengthen.

The promise of fiscal stability after the upcoming general elections, continued foreign equity and debt inflows, and intervention by the local central bank have boosted sentiment for the partially-convertible rupee in the near-term.

"We expect the elections to have a limited consequence on INR volumes – given the low uncertainty around the outcome of elections – as of today," Vijay Vikram, Asia Macro Strategist at Societe Generale said.

Bearish bets on the Malaysian ringgit MYR= were largely unchanged. The currency has recouped losses after it hit a 26-year low in February but is still down 2.4% this year.

The country's central bank on Wednesday called for an acceleration of structural reforms to ensure long-term sustainable economic strength and support for the currency.

The Asian currency positioning poll is focused 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 poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long U.S. dollars.

The figures include positions held through non-deliverable forwards (NDFs).

The survey findings ASIAPOSN are provided below (positions in U.S. dollar versus each currency):

DATE

USD/CNY

USD/KRW

USD/SGD

USD/IDR

USD/TWD

USD/INR

USD/MYR

USD/PHP

USD/THB

21-Mar-24

0.92

0.82

0.33

0.6

0.92

-0.54

1.12

0.47

1.13

7-Mar-24

0.84

0.54

0.25

0.53

0.64

-0.59

1.14

0.52

1.05

22-Feb-24

0.7

0.4

0.2

0.2

0.7

-0.4

1.3

0.3

1.1

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

1.21

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

Poll: Asia's emerging market currencies http://fingfx.thomsonreuters.com/gfx/rngs/ASIA-FX/0100214E2S7/index.html

(Reporting by Archishma Iyer and John Biju; Editing by Mrigank Dhaniwala)

((Archishma.Iyer@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.