By Rushil Dutta
(Reuters) – Bearish bets on most Asian currencies edged up slightly ahead of a U.S. Federal Reserve meeting in which they hinted at possible rate hikes next year, while Bullish bets on the yuan have reversed, according to a Reuters poll on Thursday.
At its policy meeting on Wednesday, the Fed left its key rates unchanged and did not announce the start of its asset purchase cuts, as expected, but Chairman Jerome Powell said board members d The administration believed the cut could end in the middle of next year, paving the way for possible rate hikes.
The Fed’s stance sent the dollar to its highest level in a month on Thursday, while its Asian counterparts were broadly unchanged.
Slightly bullish positions on the yuan from two weeks ago have been reversed, according to a poll of 11 respondents, amid concerns over the fate of struggling real estate developer China Evergrande – the largest bond issuer junk from Asia and a key part of the Chinese economy.
Losses on the yuan were capped, however, after the heavily indebted real estate giant announced it would pay out a bond coupon on Thursday, allaying fears of a possible default. Financial markets were closed in China and Taiwan until Tuesday and South Korea until Wednesday for the Mid-Autumn Festival.
Short bets on the South Korean won hit their highest level since March of last year, while bearish positions rose significantly on the Thai baht and Philippine peso.
As Thailand continues to suffer its most severe coronavirus outbreak, the government on Wednesday announced plans to speed up vaccinations and said it would introduce urgent stimulus measures.
Most of Thailand’s 1.5 million infections and 15,000 deaths have occurred since April, after a year of successful containment in which its key tourism sector collapsed.
The Philippines eased some restrictions last week, allowing small businesses in its capital to reopen after being closed for weeks as the country battles one of Asia’s worst COVID-19 outbreaks.
Long bets on the Indonesian rupiah held firm after the country’s central bank left its policy stable earlier this week and kept its target range for 2021 growth unchanged after a downward revision in July.
Reuters investigation focuses on what analysts believe to be current market positions in nine Asian emerging market currencies: Chinese Yuan, South Korean Won, Singapore Dollar, Indonesian Rupiah, Taiwan Dollar , Indian rupee, Philippine peso, Malaysian 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 that the market is considerably long in US dollars. The figures included positions held through Undeliverable Futures Contracts (NDF).
The results of the ASIAPOSN survey are provided below (positions in US dollars against each currency):
DATE USD / CNY USD / KRW USD / SGD USD / IDR USD / TWD USD / INR USD / MYR USD / PHP USD / THB
09/23 0.25 0.96 -0.15 -0.50 -0.20 -0.45 0.25 0.56 0.75
09/09 -0.09 0.33 -0.36 -0.44 -0.69 -0.88 0.23 0.40 0.12
08/26 0.425 0.868 0.474 0.18 0.326 -0.08 1.1922 0.779 1.351
08/12 0.32 0.69 0.77 0.2 -0.09 0.37 1.39 1.17 1.75
07/29 0.27 0.78 0.71 0.27 0.36 0.29 1.4 1.21 1.49
07/15 -0.15 0.27 0.53 0.23 0.13 0.68 1.06 1.06 1.56
07/01 -0.29 -0.29 0.02 0.36 -0.19 0.5 0.49 -0.04 0.85
06/17 -0.63 -0.36 -0.49 -0.5 -0.58 -0.21 -0.05 -0.31 0.2
06/03 -1.34 -0.51 -0.55 -0.4 -0.44 -0.71 0.32 -0.66 0.37
05/20 -0.33 0.43 0.37 -0.06 0.33 -0.03 0.26 -0.22 0.81
05/06 -0.52 -0.39 -0.58 0.31 -0.59 0.86 -0.04 -0.35 0.5
(Reporting by Rushil Dutta; poll by Harish Sridharan in Bengaluru; edited by Saumyadeb Chakrabarty)