Image: Reuters Berita 24 English - Bearish bets on Asian currencies fell on hints that China's economic suffering would ease with the li...
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| Image: Reuters |
According to the biweekly survey of 11 respondents, short positions on the South Korean won and the Taiwanese dollar were at their lowest since late February, while short positions on the Chinese yuan fell to a six-week low.
When compared to a fortnight earlier, investor mood rose as key Chinese cities such as Shanghai rolled back limits after a two-month lockdown and the country launched additional stimulus measures to boost its economy.
The yuan has recovered from a 20-month low it reached a few weeks ago, when its weakening spurred a sell-off in other Asian currencies.
Analysts, on the other hand, remain skeptical about China's economic development.
"I'm not convinced (growth) fears have subsided all that much," said Rob Carnell, Asia-Pacific head of research and chief economist at ING.
"There's a lot of uncertainty that this (relaxing Shanghai's limitations) is the end of China's COVID-19 and lockup concerns."
Although fears of inflation and a worldwide recession have festered amid confusing signaling from the Fed and its governors, sentiment in Asia has been boosted by cooling expectations of rapid U.S. interest-rate hikes.
Ahead of a major central bank meeting next week, short positions in the Thai baht were at their lowest since April.
While the country's economy showed signs of progress in May as a result of the easing of COVID-19 restrictions, headline inflation has already surpassed the central bank's goal range.
"We see a rising risk for a hawkish shift," DBS analysts wrote in a report, adding that the first raise might happen in the fourth quarter of 2022.
In recent months, other Asian central banks have tightened policy in response to rising inflationary pressures, an economic recovery from the pandemic, and the Fed's hawkish posture.
Last week, South Korea's central bank raised interest rates for the second time in a row, with more aggressive rises expected to bring consumer inflation down from 13-year highs.
Back-to-back hikes by the Bank of Korea follow a cumulative tightening of more than 100 basis points since August 2021, in one of the bank's most aggressive tightening measures ever.
The Asian currency positioning poll examines analysts' and fund managers' perceptions of 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 Thai baht.
On a scale of minus 3 to plus 3, the poll uses estimates of net long or short holdings. A plus three score suggests that the market is significantly long in US dollars.
Non-deliverable forward positions are included in the figures (NDFs).
The following are the results of the survey (positions in US dollars versus each currency):
DATE (USD/CNY) USD/USD/USD/S USD/I USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/
NY KRW GD DR TWD INR MYR PHP HB NY KRW GD DR TWD INR MYR PHP HB
02-Jun-22 1.22 0.56 0.38 0.90 0.73 1.18 1.06 0.59 0.54 1.18 1.06 0.59 0.54
19-May-22 1.90 1.55 1.07 1.19 1.63 1.35 1.53 1.15 1.56 1.90 1.55 1.07 1.19 1.63 1.35 1.53 1.15 1.56
05-May-22 1.75 1.50 0.73 0.56 1.49 1.04 1.47 1.09 1.33 1.75 1.50 0.73 0.56 1.49 1.04 1.47 1.09 1.33
21-Apr-22 0.10 1.07 -0.17 -0.03 0.94 0.75 0.89 1.00 0.71 0.10 1.07 -0.17 -0.03 0.94 0.75 0.89 1.00 0.71
07-Apr-22 -0.41 0.99 -0.46 -0.05 0.81 0.63 0.32 0.53 0.31 -0.41 0.99 -0.46 -0.05 0.81 0.63 0.32 0.53 0.31 -0.41 0.99 -0.46 -0.05
-0.16 0.98 0.19 0.04 1.16 0.99 0.12 1.40 0.46 -0.16 0.98 0.19 0.04 1.16 0.99 0.12 1.40 0.46 -0.16 0.98 0.19 0.04 1.16 0.
-0.85 1.22 0.8 0.49 0.97 1.1 0.05 0.89 -0.08 09-Mar-22 -0.85 1.22 0.8 0.49 0.97 1.1 0.05 0.89 -0.08
-0.99 0.39 -0.77 -0.01 0.33 0.07 0.2 0.19 -1.07 -1.07 -1.07 -1.07 -1.07 -1.07 -1.07 -1.07 -1.07 -1.07 -1.07 -1.
