Feb 10 (Reuters) – Investors turned bullish on the Thai baht for the first time in nearly a year, a Reuters poll showed, as Southeast Asia's second largest economy seemed poised for a recovery on the back of robust exports, easing COVID curbs, and a dovish central bank.
Market participants stayed short on most emerging Asian currencies, with bearish positions on the Indonesian rupiah touching the highest in nearly two months, the fortnightly poll found.
Positions on the baht turned modestly bullish, after staying bearish since Feb. 25 last year as the tourism-reliant economy reeled under the pressure of coronavirus curbs.
The Bank of Thailand (BoT) on Wednesday left its key interest rate at a record low despite an uptick in inflation, to maintain support for a fragile economic recovery.
While the latest COVID outbreak had slowed economic activity early in the year, Thai authorities have been trying to kickstart the critical foreign tourism sector, which accounts for about 12% of gross domestic product.
"For the first rate hike, inflation will stay within the target. So, once the economy returns to pre-COVID level in late second or third quarter, the BoT might be able to deliver the first rate hike," Poon Panichpibool, a market strategist with Krung Thai Bank, said.
External factors such as an "overdone long U.S. dollar", easing tensions surrounding Ukraine, and domestic factors such as economic recovery could be contributing to the improving bets on the baht, Panichpibool said.
He expects the BoT to deliver the first rate hike in 2023, with eyes on the economic and tourism recovery.
Elsewhere, short positions on the Indian rupee touched the highest in nearly two months as COVID restrictions continue to impact factory activity growth and fuel consumption demand. read more
The Reserve Bank of India on Thursday voted overwhelmingly to maintain a status quo on both its key interest rates, amid the uncertainties related to Omicron and its economic impact.
Long positions on the Chinese yuan remained firm, while those on the Singapore dollar hit a 14-month high after the central bank last month tightened its monetary policy settings in a first out-of-cycle move in seven years, indicating a shift in its policy.
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.
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