By Jongwoo Cheon
SINGAPORE (Reuters) – Sentiment on emerging Asian currencies improved in the last two weeks on easing views of an early rate hike by the Federal Reserve while the outlook for the Indonesian rupiah firmed, a Reuters poll showed on Thursday.
Long positions in the rupiah rose on improving economic fundamentals and in spite of some disappointment over election results, according to the survey of 13 analysts conducted between Wednesday and Thursday. Indonesia’s trade balance reverted to a larger-than-expected surplus in February.
Investors had hoped the main opposition Indonesian Democratic Party-Struggle (PDI-P) would dominate parliamentary elections on Wednesday. That would have paved the way for popular Jakarta governor Joko “Jokowi” Widodo to win July’s presidential election without the help of other parties.
The early count from the vote showed, however, the PDI-P was unlikely to secure enough votes or seats, raising chances of political uncertainty in Southeast Asia’s largest economy.
The rupiah led the slide among emerging Asian currencies on Thursday.
Bullish bets on the South Korean won hit their highest level since late November. The won touched a near six-year high on sustained capital inflows from offshore funds.
Sentiment on the Singapore dollar grew to the most optimistic since late October as the central bank was expected to maintain tight monetary policy in its semi-annual policy meeting on Monday.
The Malaysian ringgit’s long positions rose to their largest since May 2013 on demand from funds and interbank speculators.
India’s rupee reported the largest bullish bets among regional units on stock inflows in the latest positioning survey.
The Chinese yuan continued to post short positions, but sentiment became less pessimistic.
Concerns eased over capital outflows from emerging Asia as investors scaled back expectations on the timing of the Fed’s interest rate increase.
Minutes of the U.S. central bank’s March meeting showed on Wednesday that Fed officials had worried its forecasts on interest rates might appear to investors as mapping out a more aggressive cycle of rate hikes.
The Reuters survey is focused on what analysts 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 included positions held through non-deliverable forwards (NDFs).
The survey findings are provided below (positions in U.S. dollar versus each currency):
DATE CNY KRW SGD IDR TWD INR MYR PHP THB
10-Apr 0.69 -1.12 -0.68 -1.00 -0.34 -1.14 -0.64 0.07 0.10
27-Mar 0.80 0.27 0.07 -0.72 0.55 -1.06 -0.22 0.13 0.35
13-Mar 0.41 -0.01 0.23 -1.28 0.35 -1.22 -0.43 -0.18 0.07
27-Feb 0.00 -0.09 -0.07 -0.87 0.52 -0.40 -0.31 0.14 0.59
13-Feb -0.90 -0.66 -0.38 0.02 0.48 -0.20 0.28 0.16 0.35
30-Jan -1.15 -0.01 0.14 0.85 0.46 0.22 0.48 0.53 0.93
16-Jan -1.58 -0.57 0.51 0.88 0.36 -0.46 0.53 0.66 0.90
3-Jan -1.73 -1.09 0.47 1.34 -0.03 -0.37 0.53 0.48 1.38
5-Dec -1.23 -0.87 -0.03 1.58 -0.23 -0.39 0.35 0.31 1.28
21-Nov -1.51 -1.12 -0.44 1.05 -0.57 0.23 0.04 0.06 0.72
(Additional reporting by Shaloo Shrivastava in BANGALORE; Editing by Jacqueline Wong)
