(Reuters) - Investors cut their long positions on most emerging Asian currencies in the last two weeks, a Reuters poll showed, with bullish bets on the Indian rupee hitting the lowest since January as bonds dropped to a 16-month low.
India’s benchmark 10-year bond fell on fears that the central bank could raise interest rates earlier than expected after data showed annual inflation spiked to a 15-month high in November, way above expectations.
Investors reduced their bullish bets on most emerging Asian currencies as the dollar rallied over the last two weeks before of the U.S. Federal Reserve policy meeting.
Long positions on the Chinese yuan and the Singapore dollar reached their lowest in a month.
Investors maintained their positions on the Indonesian rupiah, but turned more bearish on the Philippine peso, according to the poll of 11 analysts, traders and fund managers.
Sentiment towards the Korean won, the Malaysian ringgit and the Thai baht weakened slightly.
The poll was conducted between Tuesday and Wednesday, with the bulk of the responses coming in before the conclusion of the U.S. central bank’s two-day policy meeting.
The Fed raised interest rates for the third time this year on Wednesday and stuck to its projection for three rate hikes in 2018, as policymakers forecasted a short-term jump in the country’s economic growth from the government’s proposed tax cuts.
The U.S. Treasury yields dropped and the dollar inched down against a basket of currencies after the release of the policy statement.
The Asian currency positioning 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 next poll will be conducted in January.
Reporting by Christina Martin in Bengaluru; Additional reporting by Aditya Soni and Chris Thomas; Editing by Subhranshu Sahu