Rishav Chatterjee
(Reuters) – Short rates on most Asian currencies eased marginally but remained in bearish territory, a Reuters poll showed on Thursday, as waning hopes of an imminent U.S. interest rate cut kept the dollar higher and market volatility in region giant China weakened. investor confidence.
Bearish bets on the South Korean won, Indonesian rupiah and Taiwan dollar fell, while bets on the Chinese yuan and Singapore dollar rose, according to the biweekly survey of 10 respondents.
The US dollar, which is measured against a basket of currencies, jumped to a near three-month high this week as investors cut bets that the Federal Reserve will begin cutting interest rates as early as March. [FEDWATCH] [USD/]
“The US Federal Reserve appears to be in no hurry to cut rates, which has disappointed markets, but given the recent rally, it would take a number of adverse events for the Fed to act quickly,” DBS analysts said.
Robust economic data from the US, including a closely watched jobs report that beat market expectations, strengthened the view that a rate cut in March is highly unlikely.
Meanwhile, a series of disappointing economic data from China, Asia’s largest economy, such as inflation, services and manufacturing activity, coupled with stock volatility, prevented analysts from formulating their bearish views on the region’s currencies.
Short rates on the yuan are now at their highest levels since mid-November last year.
“Sentiment around the Chinese yuan will likely depend on any new policy announcements to support Chinese equity markets ahead of the Lunar New Year,” said Wei Liang Chang, currency and credit strategist at DBS Group (OTC:).
Short positions in the Thai baht and Philippine peso also weakened.
Thailand’s central bank kept the country’s key interest rate unchanged on Wednesday, defying government pressure to cut borrowing costs to revive flagging economic growth.
“Recognizing downside risks to the outlook, we continue to expect the Bank of Thailand to keep its policy rate steady through 2024,” Aris Dakanai, an analyst at HSBC, wrote in a note.
Meanwhile, the Indian rupee stood out from the rest, with investors remaining bullish on the currency, which has outperformed its peers this year.
“INR has seen some gains recently driven by global fund purchases and improving trade deficit,” Maybank analysts wrote.
The Indian rupee is up 0.3% this year, the only currency in the region to be in positive territory.
“Our medium-term view on the Indian rupee remains broadly positive as we see growth and inflation dynamics remaining supportive for the Indian rupee,” Maybank added.
The Asian Currency Positioning Survey focuses on what analysts and fund managers believe is the current market position of nine Asian emerging market currencies: Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian dollar. ringgit and thai baht.
The survey uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates there is a significant long position in US dollars in the market.
The figures include positions occupied by non-deliverable forwards (NDF).
The survey results are presented below (positions in US dollars against each currency):
DATE
February 8, 24 0.4 0.39 0.41 0.4 0.32 -0.17 1.07 0.28 0.72
01/25/24 0.37 0.9 0.28 0.51 0.49 -0.18 1.07 0.5 0.9
01/11/24 0.18 0.3 0.02 0.19 0.05 -0.15 0.72 0.09 0.03
December 14, 23 0.02 -0.09 -0.22 -0.05 -0.33 0.34 0.58 -0.22 0.16
November 30, 23 0.12 -0.05 -0.07 -0.05 -0.13 0.63 0.73 -0.1 -0.1
November 16, 23 0.77 0.49 0.38 0.77 0.63 0.82 1.14 0.38 0.28
November 2, 23 1.32 1.18 0.74 1.44 1.31 1.35 1.33 0.96 0.85
10/19/23 1.02 1.16 0.84 1.06 1.06 1.21 0.78 0.89 0.67
October 5, 23 1.17 1.25 0.81 1 1.25 0.92 1.08 0.75 1.03