Bearish bets held on Asian currencies as virus issues persist: Reuters poll

Aug 12 (Reuters) – Investors remained bearish against most Asian currencies with the Thai baht the worst as economies in the region continued to struggle with outbreaks of Delta variants, while the strength of the dollar also weighed, according to a Reuters poll.

Short bets were slightly increased on the Chinese yuan, Singaporean dollar and Indian rupee compared to two weeks ago, as they were mostly held on the Philippine peso and Indonesian rupiah, according to a survey of 11 people interviewed.

Sentiment reversed on the Taiwan dollar as investors turned bullish on the currency for the first time since early July, with strong export data indicating an improving outlook for growth.

The surge in cases of the Delta variant of the coronavirus is rocking parts of Asia, with Thailand and South Korea recording record daily infections, and slow vaccination programs further straining their health infrastructure. Read more

Regional currencies have also fallen out of favor, with the dollar hitting a four-month high after a recent round of strong employment data that fueled expectations of a tightening of monetary policy in the United States. Read more

Bearish bets on the baht were at their highest since August 2015, after the Bank of Thailand last week lowered growth forecasts for the trade and tourism-dependent country for the third time this year.

The baht has weakened by more than 11% and is the region’s worst performing currency so far this year, while Thai stocks (.SETI) have lost nearly 3.5% since the end of June.

“Nationally, the baht risks a further deterioration in Thailand’s outlook … which cannot be ruled out if the pandemic is not brought under control by the start of the fourth quarter,” DBS analysts said in a note. of research.

“On the outside, the baht is not immune to the hawkish bent of the US Federal Reserve,” they added.

Investors raised their short positions in the yuan slightly as recent economic indicators pointed to slowing economic growth, while the latest COVID-19 outbreak in China has clouded the outlook.

While the yuan has held up against its peers in recent weeks, the latest outbreak in China – now in its fourth week – threatens to restrict tourism and activity in the service sector. Read more

Meanwhile, the Taiwan dollar was an outlier as strong export data pointed to a brighter economic outlook. Exports rose for the 13th consecutive month to an all-time high in July, driven by manufacturers rushing to deal with a global chip shortage.

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 significantly 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):

Reporting by Harish Sridharan in Bengaluru; Editing by Ana Nicolaci da Costa

Our Standards: Thomson Reuters Trust Principles.