POLL-Asian FX bulls return as China’s easing of COVID restraints improves outlook
December 15 (Reuters) – Investors were the most bullish on the Singapore dollar and Thai baht since the Russian-Ukrainian conflict erupted in February. Sentiment was boosted by expectations that China would ease tough COVID restrictions and major central banks would loosen monetary policy, according to a Reuters poll.
Long positions in most other emerging Asian currencies are also solid, as are long positions in the Malaysian ringgit. MYR= and South Korean Won KRW=KFTC It was the highest in nearly two years, according to a biweekly poll of 10 analysts.
Other Sentiments on the Chinese Yuan CNY=CFXS While investors turned bullish against the Philippine peso, they were largely neutral. PHP= First time since July 2021.
The poll was conducted before the US Federal Reserve Widely Expected 50 Basis Point Rate Hike The slowdown after four consecutive 75bps rate hikes comes with the warning that more rate hikes are needed despite the risk of recession.
“Continued rate hikes by the Fed mean that central banks in Southeast Asia will continue to raise rates as well,” said Poon Panichipibur, market strategist at Krungthai Bank.
“But for most (regional) central banks, the pace of rate hikes is likely to be slower than previous hikes.”
Thai baht long position THB=THB is at its highest level since late February, while the Singapore dollar Singapore dollar = Highest since early February.
Panichpibool expects the baht to be “much stronger” than the current baht of 34.76 per dollar by the end of the first quarter of 2023, but the risk of a US recession was a medium-term risk.
Investor appetite for riskier Asian assets has improved further recently after China, the region’s biggest trading partner and manufacturing powerhouse, began easing its strict domestic coronavirus measures, and the region’s boosted the growth prospects of
“Weaker growth in China is one of the biggest drivers of the dollar’s strength,” Barclays analysts wrote in a note. ‘ wrote.
Investors Slightly Cut Indonesian Rupiah Short Positions IDR= and indian rupee INR=INbut both were the shortest of the nine regional currencies in the poll, with healthy margins.
The rupiah and rupee are the region’s worst performers so far this year, heading down 8.8% and 10% respectively.
Analysts at DBS expect the rupee to stabilize between 80 and 84 per dollar by 2024, and the rupiah to stabilize between 15,000 and 16,000 per dollar over the next two years.
The Asian Currency Positioning Survey lists nine Asian emerging market currencies that analysts and fund managers believe are in their current market positions: Chinese Yuan, South Korean Won, Singapore Dollar, Indonesian Rupiah, Taiwan Dollar, Indian Rupee, Philippine Peso, Malaysian currency). ringgit and thai baht.
Polls use estimates of net long or short positions on a scale of minus three to plus three. A score of plus 3 indicates that the market is significantly long against the USD.
This figure includes positions held through non-deliverable forwards (NDFs).
Survey results Asian Pawn Provided below (USD vs. each currency position):
US Dollar/Singapore Dollar
US Dollar/Taiwan Dollar
December 15, 2022
December 1, 2022
October 20, 2022
October 6, 22
September 8, 22
August 25, 22
August 11, 22
Poll: Asian Emerging Market Currencieshttp://fingfx.thomsonreuters.com/gfx/rngs/ASIA-FX/0100214E2S7/index.html
(Reporting by Upasana Singh, Bangalore; Editing by Savio D’Souza)
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
https://www.nasdaq.com/articles/poll-asian-fx-bulls-return-as-easing-china-covid-curbs-improves-outlook POLL-Asian FX bulls return as China’s easing of COVID restraints improves outlook