Sentiment toward emerging Asian currencies weakened in the last two weeks after hawkish comments from Federal Reserve officials rekindled bets for US interest rates to rise this year and gave a lift to the dollar.
Market positioning in the Chinese yuan was estimated to be the most bearish since late July, according to the Reuters survey of 18 fund managers, analysts and currency traders conducted from Tuesday through Thursday.
Sentiment toward the Malaysian ringgit and the Singapore dollar turned slightly bearish. Bullish bets on the Indonesian rupiah were the smallest since late May, when rupiah sentiment had been bearish. Bullish bets were scaled back in other Asian currencies such as the South Korean won, Taiwan dollar, Indian rupee, Thai baht and the Philippine peso. After holding firm in the first half of August on the back of inflows from yield-seeking investors, Asian currencies faltered in the second half as upbeat comments from Fed policymakers on the US economy bolstered the greenback.
Fed Chair Janet Yellen said last Friday at the Fed's annual conference in Jackson Hole, Wyoming, that the case for a US rate increase had grown stronger in recent months. Fed Vice Chair Stanley Fischer said last week that Yellen's speech was consistent with expectations for possible interest rate hikes this year. The poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.
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