Asian Currency

Short bets on Asian currencies ease on US rate cut optimism


POLL-Short bets on Asian currencies ease on US rate cut optimism

Bearish positions on most Asian FX ease

Philippine peso most shorted Asian currency

Short position on Thai baht lowest since early-Feb

By Ayushman Ojha

May 16 (Reuters) Bearish bets on most emerging Asian currencies eased for the first time in nearly two months on expectations of the U.S. Federal Reserve cutting interest rates in September, which were solidified after recent inflation data, a Reuters poll showed on Thursday.

Short positions on the South Korean won KRW=KFTC, the Singapore dollar SGD=, and the Taiwanese dollar TWD=TP were at their lowest level since March 21, according to a fortnightly poll of 12 analysts.

All poll responses came before data on Wednesday showed U.S. consumer prices in April fell to their lowest level in three years, raising hopes that the Fed can cut rates twice this year, sending the dollar to multi-month lows. FRX/

Asian currencies have gotten a tailwind from softer U.S. inflation data, and as other macro data from U.S. including retail sales, jobs data, and the housing price index suggested that the economy is easing, said Lloyd Chan, senior currency analyst at MUFG Bank.

Analysts also suggested that the recent gains in the Chinese yuan CNY=CFXS and the Japanese yen JPY= are having a positive spillover effect on other regional currencies.

Meanwhile, recent data showed a downward trend in inflation in Asian countries, giving some leeway to the central banks.

“We think the combination of domestic, external and stability factors mean all central banks in the region will be on hold for longer,” Barclays analysts wrote in a note.

Last week, Malaysia’s central bank kept its benchmark interest rate unchanged as it continued measures to shore up the ringgit MYR=, which has weakened almost 2% this year.

Indonesia’s central bank governor also said that it will likely not need to raise rates further as last month’s hike has attracted capital inflows and stabilised the rupiah IDR= amid a better-than-expected global backdrop.

Short positions on the ringgit reached their lowest since early April, while those on the rupiah also eased.

Although bearish bets on the Philippine peso PHP= eased, it remained the most shorted among Asian currencies.

The Bangko Sentral ng Pilipinas (BSP) kept its key policy rate steady for a fifth straight meeting on Thursday.

Bearish positions on the Thai baht THB=TH were at their lowest level in over three months. The baht has weakened the most among emerging regional currencies this year with an over 5% slump.

“We expect to see much more strength coming in for the Thai baht, possibly in Q4, when the tourism season comes back again and the U.S. Fed potentially starts their rate cuts,” MUFG’s Chan said.

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

16-May-24

1.05

0.96

0.35

0.96

1.02

0.39

1.23

1.29

1.00

02-May-24

1.25

1.61

0.89

1.39

1.40

0.49

1.46

1.44

1.39

18-Apr-24

1.25

1.59

0.80

1.32

1.24

0.43

1.42

1.19

1.28

4-Apr-24

1.18

1.09

0.42

1.13

1.17

0.00

1.15

0.62

1.35

21-Mar-24

0.92

0.82

0.33

0.60

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

0.70

0.40

0.20

0.20

0.70

-0.40

1.30

0.30

1.10

8-Feb-24

0.40

0.39

0.41

0.40

0.32

-0.17

1.07

0.28

0.72

25-Jan-24

0.37

0.90

0.28

0.51

0.49

-0.18

1.21

0.50

0.90

Reporting by Ayushman Ojha in Bengaluru; Editing by Varun H K

For the new Reuters scrolling global forex service, please click FXBUZ
Double click on brackets for following items:
Asian currencies AFX= Asian currencies in Asia AFX=A
Malaysian ringgit MYRX= Indonesian rupiah IDRX=
Singapore dollar SGDX= Thai baht THBX=
Taiwan dollar TWDX= Hong Kong dollar HKDX=
Philippine peso PHP= Korean won KRW=

SPEED GUIDES MONEY ASEAN
Exotic currencies EXOTIC/1Non-G7 currencies CCY/1

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Thailand TH Indonesia ID Hong Kong HK Taiwan TW
Philippines PH Korea KR All emerging markets EMRG
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