Investors cut short positions on most Asian currencies; yuan bear bets at 21-month low

* Rupiah short interest lowest since May
* Bets rupee will fall rise on cbank uncertainty
* Korean won bear bets fall to over one-year low

By Rushil Dutta
Dec 13 (Reuters) - Bearish bets on most Asian currencies
fell over the past two weeks, a Reuters poll showed on Thursday,
as the U.S. Federal Reserve is widely expected to hold rates
next year after a near certain hike next week.
Wagers on the yuan weakening declined by half as trade talks
between Washington and Beijing gained traction.
Short interests in the yuan were at the lowest level since
March 2017, the poll of 11 respondents showed, as the local unit
gallops towards its best monthly performance since January,
firming over 1 percent so far this month.
The yuan is of late underpinned by a perceived improvement
in Sino-U.S. trade relations, which have been strained much of
this year and often exacerbated by verbal volleys exchanged
between Beijing and U.S. President Donald Trump.
However, breaking from his usual stonewalling stance, Trump
told earlier this week that talks were taking place with Beijing
over phone and that he would not raise tariffs on Chinese
imports until he was sure about a deal.
He even offered to intervene in the Justice Department's
case against the chief financial officer of telecoms giant
Huawei Technologies, who was granted bail by a Canadian court
earlier this week.
Meanwhile, a weakening in the dollar outlook also gave Asian
currencies a lift.
Although the dollar has gained over 5 percent so far this
year on the back of Fed rate hikes, the recent softening of U.S.
Treasury yields and lukewarm economic data have led some to
forecast that the dollar may have hit a ceiling.
While the Fed is widely expected to raise rates next week,
investors see barely one more hike next year. However, some
banks such as JP Morgan expect as many as four hikes in 2019.
Bearish bets on the Singapore dollar receded
marginally, while those on the Indonesian rupiah fell to
their lowest since the beginning of May.
Short interests in the Korean won fell to a more
than one-year low, while those in its low-yielding peer the
Taiwanese dollar were at their lowest since May-end.
Meanwhile, bearish bets piled up on the Indian rupee
after a sharp decline two weeks ago, as investors
digested the sudden resignation of the central bank governor,
Urjit Patel, on Monday. Shaktikanta Das, an ex-finance ministry
official, was swiftly placed in the top post.
Besides, data on Wednesday showed retail inflation rate
dropped to a 17-month low in November, increasing chances the
new RBI chief would hold rates at his first policy meeting.
The Reuters survey is focused on what analysts 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.
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
U.S. dollars. The figures included positions held through
non-deliverable forwards (NDFs).
The survey findings ASIAPOSN are provided below (positions
in U.S. dollar versus each currency):

13/12 0.52 0.44 0.54 0.57 0.34 0.72 0.78 0.66 0.15
29/11 1.06 0.74 0.57 0.71 0.73 0.55 0.96 0.70 0.50
15/11 1.28 0.85 0.87 1.37 0.73 1.19 0.97 0.93 0.48
1/11 1.37 0.99 0.75 1.69 0.82 1.37 0.89 1.07 0.53
18/10 1.14 0.82 0.49 1.68 0.60 1.68 0.75 1.36 0.07
4/10 1.11 0.56 0.70 1.65 0.65 1.74 0.74 1.53 0.10
20/9 1.12 0.79 0.95 1.57 0.69 1.72 0.82 1.44 0.33
6/9 0.92 0.64 0.86 1.37 0.68 1.72 0.90 1.13 0.24
23/8 0.93 0.71 0.84 1.27 0.91 1.19 0.88 0.86 0.47
9/8 1.52 0.94 0.80 1.21 0.99 1 0.86 1.02 0.66

(Additional reporting by Niyati Shetty and Nikhil Nainan in
Bengaluru; Editing by Subhranshu Sahu)

Double click on brackets for following items:
Asian currencies Asian currencies in Asia
Malaysian ringgit Indonesian rupiah
Singapore dollar Thai baht
Taiwan dollar Hong Kong dollar
Philippine peso Korean won
Exotic currencies Non-G7 currencies
All Singapore news All Malaysian news
Thailand Indonesia Hong Kong Taiwan
Philippines Korea All emerging markets
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Foreign exchange technical analysis [FRX&INSI]))

2018-12-13 08:43:56

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