October 15, 2015 / 9:04 AM / 2 years ago

POLL-Asia FX sentiment improves on changed US rate hike views; yuan, rupee bullish

* Yuan sentiment positive for 1st time since early Aug
    * Rupee bullish bets largest since mid-April
    * Singapore dollar short positions smallest since mid-May
    * Rupiah bearish bets lowest in almost 1 year

    By Jongwoo Cheon
    SINGAPORE, Oct 15 (Reuters) - Sentiment towards emerging
Asian currencies improved in the last two weeks with views on
China's yuan and India's rupee bullish, a Reuters poll showed,
as expectations of a U.S. interest rate hike soon lost steam.
    The yuan reported the first optimistic positions
since early August, according to the survey of 20 fund managers,
currency traders and analysts conducted from Tuesday through
Thursday.
    The renminbi on Monday hit its strongest level since China's
surprise Aug. 11 devaluation. The central bank often set its
daily official guidance rate firmer as a part of efforts to
stabilise the currency since the devaluation. 
    China also made a fresh push for the yuan to be included in
the International Monetary Fund's benchmark currency and argued
that recent reforms put it closer to qualifying. 
    India's rupee reported the largest long positions
since mid-April with sentiment on the currency turning positive
as foreign investors in India aggressively bid for new limits on
government bonds as well as for state debt. That indicated
continued strong interest in a country with better economic
fundamentals than many other Asian countries. 
    The Singapore dollar's short positions shrank to
the smallest since mid-May as the central bank on Wednesday
eased monetary policy less than some had expected. 
    The city-state's currency touched its strongest in more than
two months as it found further support from data showing the
economy barely avoided a recession in the third quarter.
    Bearish bets on the Indonesian rupiah fell to the
lowest since late November last year, thanks to capital inflows.
    Last week, the rupiah jumped 9.2 percent against the dollar,
the best weekly performance since July 2001, Thomson Reuters
data showed. The Indonesian currency enjoyed inflows into the
country's stocks and bonds.
    That came as investors sought higher yields in Asia on
ebbing expectations that the U.S. Federal Reserve will raise
interest rates this year, especially after disappointing U.S.
September jobs data.
    U.S. retail sales barely rose in September and producer
prices reported their largest decline in eight months, raising
doubts a Fed rate hike was imminent. 
    The minutes of the Fed's September meeting showed that the
U.S. central bank held off a long-anticipated rate increase to
make sure that a global economic slowdown would not hurt the
U.S. economy. 
    Some Fed officials including Governor Daniel Tarullo argued
against a rate hike within this year amid the China-led global
economic slowdown. 
    Those developments prompted investors to unwind bearish bets
on most emerging Asian currencies, which they had built up on
expectations of higher U.S. borrowing costs.
    Sentiment on South Korea's won became nearly
neutral, the best since late April, on demand from offshore
funds.
    The Bank of Korea on Thursday left its key interest rates at
a record low unchanged, defying some expectations of a cut. It
offered a cautiously optimistic view on the economy.
 
    Bearish bets on the Malaysian ringgit and the
Philippine peso slid to the lowest since May.
    The Taiwan dollar the Thai baht also
posted the smallest short positions since late June.
    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.
    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 include positions held through non-deliverable
forwards (NDFs).
    The survey findings are provided below (positions
in U.S. dollar versus each currency):

 DATE     CNY   KRW   SGD   IDR   TWD   INR   MYR   PHP   THB
 15-Oct  -0.08  0.03  0.13  0.15  0.34 -0.31  0.67  0.22  0.60
 1-Oct    0.13  1.01  1.20  1.35  1.04  0.11  1.71  0.68  1.20
 17-Sept  0.26  0.60  0.62  1.27  0.73  0.27  1.48  0.54  1.00
 3-Sept   0.62  1.09  1.31  1.45  1.15  0.66  1.96  0.86  1.51
 20-Aug   0.91  1.56  1.50  1.55  1.58  0.75  2.21  1.04  1.86
 6-Aug   -0.15  1.27  1.19  1.16  0.91  0.11  1.82  0.84  1.40
 23-July -0.50  1.32  0.97  0.69  0.70  0.09  1.24  0.52  1.18
 9-July  -0.13  1.09  0.38  0.78  0.56 -0.06  1.33  0.37  0.80
 25-June -0.70  0.29  0.22  0.80  0.11 -0.26  1.10  0.30  0.57
 11-June -0.47  0.77  0.61  1.12  0.48  0.05  1.39  0.43  0.69
 28-May  -0.62  0.67  0.53  1.05  0.02  0.29  0.86  0.03  0.89
 
 (Additional reporting by Shaloo Shrivastava in BENGALURU;
Editing by Richard Borsuk)

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