Investors have turned bearish on the Chinese yuan for the first time in nearly two years, while becoming pessimistic on the Indian rupee and the Indonesian rupiah and cutting bets on other Asian currencies, a Reuters poll showed. The survey of 10 currency analysts, conducted on Wednesday and Thursday, showed that traders took short positions in the yuan for the first time since April 2010, when Reuters started including the currency, also known as the renminbi, in the poll.
That came as China's central bank appeared to be testing market reaction to a weakening trend for the yuan since the start of this month, while officials stated that the government needed to widen the range for yuan trading. China suffered its largest trade deficit last month in at least a decade, data showed on March 10. Investors turned bearish on the rupiah and the rupee for the first time since early January.
Recently, the Indonesian currency has suffered from bond inflows on worries about inflation amid higher oil prices. The rupee has been pressured by oil importers' dollar demands. Currency players cut bullish bets on other emerging Asian currencies such as the South Korean won and the Singapore dollar as hopes for more monetary policy steps by the Federal Reserve weakened.
The previous poll, published March 1, showed investor confidence returned to most emerging Asian currencies as major central banks eased their policies to bolster growth. The Reuters survey focused on what analysts believe are the current market positions in nine Asian emerging market currencies: Chinese yuan, won, Singapore dollar, rupiah, Taiwan dollar, rupee, Philippine peso, ringgit and Thai baht. 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).