Investors nearly halved positions in the Chinese yuan in the last two weeks, to their lowest level in more than a year, while they turned slightly bullish on the South Korean won, a Reuters poll showed on Thursday. The survey of 10 currency analysts, conducted on Wednesday and Thursday, also found that due to worries about Europe, investors remained bearish on most emerging Asian currencies. Still, they have become less pessimistic than in the previous poll two weeks earlier.
Currency players slashed bets on the yuan to their lowest since August 2010 as investors sold the Chinese currency at a time of strong dollar demand at year-end. This forced the yuan to hit its lower daily trade limit for the seventh straight session on Thursday. But they became slightly optimistic about the won, the best performer among emerging Asian currencies last week. Dealers said a central bank in central Asia bought the local currency to acquire South Korean bonds.
Investors sharply reduced bets against the Singapore dollar and Indian rupee, the poll showed. The Reuters survey focused on what analysts believe are the current market positions in eight Asian emerging market currencies: Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso and Malaysian ringgit.
For the yuan, five out of the 10 analysts were bullish while the rest were neutral. In the previous poll published on November 23, seven out of 11 analysts were bullish on the Chinese unit with four neutrals. The prior survey already showed investors grew more bearish on most emerging Asian currencies as the euro zone's debt crisis deepened, and views on the rupee were the most pessimistic in more than three years. The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long on dollars. The figures included positions held through non-deliverable forwards (NDFs).