Bullish bets on the Taiwan dollar hit a near eight-month high in the last two weeks as hopes for more global stimulus and European steps to tackle the region's debt crisis restored some confidence in riskier assets, a Reuters poll showed on Thursday.
Long positions in the Malaysian ringgit and the Thai baht increased to their largest since early March while bullish bets on the Chinese yuan touched a near five-month peak, the survey of 12 currency analysts.
Optimistic views on the Philippine peso, the Singapore dollar and the South Korean won reached their highest since early August, according to the poll conducted on Wednesday and Thursday. That compared with the previous survey released on August 30, which showed currency players reduced bullish bets on most emerging Asian currencies amid caution over policies of the Federal Reserve and the European Central Bank.
But a weaker August US jobs data and Fed Chairman Ben Bernanke's comments boosted hopes that the central bank will launch another stimulus such as a third round of quantitative easing this week. The US central bank is set to conclude its policy meeting later in the day.
European policymakers also took steps to ease the three-year debt crisis with the ECB announcing a new bond-buying programme. Germany's Constitutional Court also approved the euro zone's bailout fund. Such positive developments improved sentiment on currencies of export-dependent emerging Asian countries.
The Taiwan dollar on Thursday hit its strongest level versus the greenback in more than three months, despite sightings of central bank intervention to sell the Taiwanese unit, as demand poured in from foreign financial institutions and the island's exporters. On Wednesday, the ringgit touched a four-month peak, fuelled by fund inflows and exporters.
Global weakness in the dollar also prompted currency market players to raise long positions in the yuan to their largest since late April. Still, some investors saw such optimistic positions in emerging Asian currencies as excessive, given a slowing regional economy.
Some dealers and analysts expected regional units to see some corrections, especially if the Fed falls short of market hopes, saying expectations for another round of quantitative easing mostly have been priced in. The Reuters survey focused on what analysts believe are 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 poll uses estimates of net long or short positions on a scale of minus 3 to plus 3.
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