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POLL-Asia FX pessimism ebbs on pause in dlr rally; yuan bearish bets near 2-mth low
December 8, 2016 / 6:38 AM / a year ago

POLL-Asia FX pessimism ebbs on pause in dlr rally; yuan bearish bets near 2-mth low

* Yuan short positions lowest since mid-Oct on outflow curbs
    * Ringgit bearish bets near 2-month low after FX
    * Capital inflows slash rupiah, won pessimistic positions

    By Jongwoo Cheon
    SINGAPORE, Dec 8 - Sentiment towards emerging Asian
currencies became less bearish in the last two weeks, a Reuters
poll showed on Thursday, as the dollar pulled back from a sharp
rally that followed Republican Donald Trump's surprise win in
last month's U.S. election.
    There was also less pessimism on the near term outlook for
regional currencies as the European Central Bank is predicted to
extend its asset-purchase scheme on Thursday, reinforcing the
yield allure in Asia.
    China's yuan reported the smallest bearish bets
in nearly two months, according to the survey of 18 fund
managers, analysts and currency traders conducted between
Tuesday and Thursday.
    That came as the country's regulators took measures to stem
capital outflows including new rules on overseas yuan loans to
curb outbound funds and reduce pressure on the currency.
    State-run banks were also suspected of providing dollar
liquidity to stabilise the renminbi. These efforts helped the
Chinese currency snap a three-week losing streak last week.
    Moreover, solid Chinese economic data including Thursday's
November trade pointed to a pickup in the world's second-largest
    The Malaysian ringgit's pessimistic positions slid
to the lowest since late October. Malaysia's central bank on
Dec. 2 announced fresh measures to boost liquidity and encourage
more domestic trade of the currency in a bid to ease
depreciation pressure. 
    Earlier this month, the ringgit fell to the weakest since
September last year when it hit a 17-year low.
    Bearish bets on other emerging Asian currencies slumped as
the dollar came off a 13-1/2-year peak against six major
currencies. The dollar has been on a tear in the weeks since
Trump's victory on Nov. 8 on expectations the new administration
will set growth on a higher gear.
    Investors were also cautious as U.S. jobs data for November
pointed to pockets of weakness in earlier months, raising
questions about the pace of Federal Reserve policy tightening 
next year.
    Nonfarm payrolls increased 178,000 jobs last month, but data
for September and October were revised to show that fewer jobs
were created than previously reported. Wage growth for the month
was just 2.5 percent, compared with expectations of 2.8 percent,
unchanged from October. 
    In addition, foreign investors added holdings in some Asian
bonds on expectations that the ECB may stay easier for longer.
    The Indonesian rupiah's pessimistic bets more than
halved as investors sought one of the highest bond yields in
    Pessimistic positions on the South Korean won 
shrank to the smallest since mid-October, despite a deepening
political corruption scandal that could see President Park
Geun-hye impeached and possibly prosecuted. 
    Foreign investors bought South Korea's stocks and bonds this
    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):

 8-Dec    0.93  0.55  0.88  0.24  0.39  0.28  0.83  0.74  0.41
 24-Nov   1.38  1.02  1.35  0.61  0.77  0.44  1.36  1.22  0.49
 10-Nov   1.19  0.86  1.13  0.16  0.26 -0.22  0.88  1.14  0.36
 27-Oct   1.23  0.60  1.17 -0.36  0.32 -0.20  0.58  0.91  0.44
 13-Oct   0.73  0.51  0.80 -0.38  0.29 -0.19  0.73  1.20  0.96
 29-Sept  0.41 -0.24  0.50 -0.75 -0.11 -0.41  0.51  0.87 -0.32
 15-Sept  0.70  0.00  0.19 -0.31 -0.10 -0.40  0.37  0.30 -0.04
 1-Sept   0.60 -0.16  0.13 -0.11 -0.23 -0.21  0.19 -0.04 -0.27
 18-Aug  -0.04 -1.08 -0.47 -0.81 -0.90 -0.60 -0.33 -0.49 -0.69
 4-Aug    0.12 -1.01 -0.52 -0.84 -0.67 -0.56  0.16 -0.04 -0.56
 21-July  1.01 -0.50  0.06 -0.63 -0.37  0.11  0.04  0.10 -0.20
 7-July   1.12 -0.11 -0.38 -0.69  0.09  0.24  0.06  0.18 -0.10

 (Reporting by Jongwoo Cheon; Additional reporting by Shaloo
Shrivastava in BENGALURU; Editing by Shri Navaratnam)

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