People look at the exchange rate at a moneychanger displaying a poster of U.S. dollar bill, Chinese Yuan and Malaysia Ringgit in Singapore August 24, 2015. REUTERS/Edgar Su
April 21 (Reuters) – Bearish bets on most Asian currencies firmed, a Reuters poll found on Thursday, as several regional central banks trail the U.S. Federal Reserve in tightening their monetary policies to fight red-hot inflation.
Analysts turned short on the Chinese yuan for the first time since early-October due to worries of an economic slowdown in the country caused by COVID-19 lockdowns, the fortnightly poll of 14 respondents showed.
"A combination of a lack of policy support and zero-COVID stance has weakened China's growth prospects and weighed on yuan sentiments," analysts at Maybank wrote in a note.
Southeast Asian central banks have sought to balance lifting interest rates off historic lows — to tackle price pressures exacerbated by the Ukraine war — and supporting economic growth as the region emerges from a coronavirus-driven downturn.
Market participants raised short positions on the Malaysian ringgit to their highest since late-August, while the position was the largest since early-December in case of the Thai baht .
Thailand's central bank said last week it will focus monetary policy efforts on shoring up sluggish growth in Southeast Asia'a second-largest economy, as it continued to see inflationary pressures as transitory.
Bearish bets were also raised on the Taiwan dollar , Indian rupee and the Philippine peso .
The dim view on emerging market currencies comes against the backdrop of a steady rise in the U.S. dollar amid expectations of more rate hikes from the Fed. The currency hit a two-year peak against a basket of currencies this week. read more
"Asian currencies have generally faced pressure this month as U.S. yields have moved higher, helping propel the USD, and capital outflows from the region have accelerated," Mitul Kotecha, senior EM strategist at TD Securities said.
"It's hard to see any turnaround in Asian currencies unless U.S. yields take a decisive turn lower and in turn the USD reverses course more broadly."
Bets on the Indonesian rupiah inched closer to a bearish territory after the country's central bank cut its 2022 economic growth outlook amid risks from inflation and geopolitical tensions.
Meanwhile, short positions on South Korea's won rose and long positions in the Singapore dollar were cut despite central banks in both countries recently tightening their monetary policy. read more
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 are provided below (positions in U.S. dollar versus each currency):
Our Standards: The Thomson Reuters Trust Principles.
The U.S. Federal Reserve should consider more 75 basis-point interest rate hikes at coming meetings in order to bring high inflation back down to the central bank's goal, Fed Governor Michelle Bowman said on Saturday.
Analysts polled by Argentina's central bank sharply raised their inflation estimate for 2022 to 90.2%, up 16.2 percentage points from the previous month's forecast, according to a survey published on Friday.
Reuters
Analysts and market participants in Peru raised their expectations for the Andean country's 2022 inflation on Friday, a monthly central bank survey showed, saying they now forecast an increase of between 6.5% and 7.5%, against a 6% to 7% rise previously projected.
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