By Anushka Trivedi
(Reuters) – Investors have made short bets on most emerging Asian currencies, according to a bimonthly Reuters poll, as a multitude of factors, including expectations of U.S. rate hikes, rising inflation and signs of slowing global economic growth, boosted the dollar.
Long positions on the Singaporean dollar, Taiwanese dollar and Indian rupee were reversed, while bearish views on the South Korean won hit a two-year high, according to the 12-person poll.
The Indonesian rupiah was the only currency with an uptrend, although long bets were almost halved.
The safe haven greenback has peaked in a year since the Federal Reserve’s hawkish tilt two weeks ago led markets to forecast a rate hike in 2022, with sharp increases in benchmark Treasury yields adding to its appeal.
The dollar is expected to dominate currency markets for another year as inflation concerns emerge, with soaring energy prices amid tight supply threatening the economy. global economic growth.
Asia’s economic outlook has already been marred by China’s slowdown, supply chain bottlenecks, and the lingering effects of devastating waves of COVID-19 in trade-dependent countries like Singapore, Thailand and the Philippines.
However, bets on the yuan barely changed as the currency remained resilient despite a debt crisis from real estate giant China Evergrande, which HSBC attributed in part to the onshore market’s hope of a policy adjustment by the Chinese central bank.
Crude prices testing $ 80 a barrel prompted investors to cut the rupee for the first time since mid-August, with India being the world’s third-largest consumer of oil. The rupee has been the best-selling currency in Asia since the Fed meeting.
Chart: Asia EM FX from the Fed – https://fingfx.thomsonreuters.com/gfx/mkt/byprjlznjpe/EM%20asia%20with%20oil.PNG
Barclays analysts said a recent slowdown in the flow of foreign funds to Indian stocks appeared to be offset by a rally in bonds, as the economy’s growth trajectory was intact and would prevent the rupee from crossing the 75 mark. , 0 for a dollar.
Taiwan and South Korea’s currencies depreciated alongside a sell-off on local stock exchanges dominated by inflation-sensitive technology stocks. They have faced outflows of $ 2.13 billion and $ 762 million, respectively, so far this month.
Meanwhile, investors preferred the rupee more among Asian currencies as rising commodity prices and a large trade surplus put a floor below the risky currency, Barclays analysts said.
The Asian Currency Positioning Survey focuses on what analysts and fund managers believe to be the 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 significantly long in US dollars.
Figures include positions held through Undeliverable Futures Contracts (NDF).
(Reporting by Anushka Trivedi in Bangalore; Editing by Subhranshu Sahu)