SINGAPORE/BANGALORE (Reuters) - Short positions in the Indonesian rupiah and the Malaysian ringgit rose to the highest levels in more than four years as investor sentiment toward emerging Asian currencies soured, a Reuters poll showed.
Asian assets have tumbled this week and regional outflows have increased on fears the U.S. Federal Reserve will begin scaling back its massive stimulus programme later this year, marking the beginning of the end of a wave of cheap money which flooded into global markets.
Bearish bets on the rupiah increased to the largest since November 2008, according to the survey of 16 foreign exchange analysts published on Thursday. That came even as Indonesia took steps to stabilise the currency including a surprise interest rate hike.
Short positions in the ringgit increased to the largest since April 2009, showed the poll conducted on Wednesday and Thursday.
Views on the Indian rupee turned the most pessimistic since May 2012 as the currency hit fresh record lows on concerns over the country’s dependence on foreign capital inflows to fund its current account deficit.
Indonesia and India are the most vulnerable among emerging Asian markets to capital outflows on growing expectations the Fed will reduce its monetary stimulus. These countries run massive current account deficits that are financed primarily by foreign portfolio investments.
Fed Chairman Bernanke said on Wednesday that the U.S. economy is expanding strongly enough for the Fed to begin slowing the pace of its $85 billion monthly purchases of Treasuries and mortgage-backed securities, with the goal of ending it in mid-2014.
A cut in the Fed’s monetary stimulus is seen reducing yield attractiveness in emerging Asian countries and inflows to the region, analysts and traders said.
Sentiment on the Philippine peso turned bearish with pessimistic bets on the currency at the highest since January 2009.
The peso and the ringgit touched their lowest in more than one year on Thursday.
Short positions in the South Korean won rose five-fold, while such bets on the Singapore dollar more than doubled.
Long positions in the Chinese yuan fell to the lowest since mid-March.
The Reuters survey is 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 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).
Editing by Kim Coghill