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POLL-Bearish bets reduced on most Asia FX, trade worries pressure yuan

Published 05/14/2020, 12:54 PM
Updated 05/14/2020, 01:00 PM
© Reuters.
USD/SGD
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IDR/TWD
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CNY/KRW
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INR/MYR
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PHP/THB
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* Investors trim short bets on most Asia FX as restrictions
ease
* Bearish positions on Chinese yuan climb amid trade spat
* Investors on the verge of turning bullish on Thai baht

By Rashmi Ashok
May 14 (Reuters) - Sentiment toward most Asian currencies
turned less bearish, a Reuters poll showed, as a decline in new
coronavirus cases prompted some countries to reopen their
economies, but investors doubled down on short bets on the
Chinese yuan.
Bearish positions on the yuan CNY=CFXS rose from a
fortnight ago, a Reuters poll of 15 respondents showed, after
the country's trade relations with the United States soured even
as the export powerhouse tries to regain footing amid a
pandemic-fuelled slump in demand for its products.
"Recent statements by U.S. President Donald Trump have shown
that a sudden spike in U.S.-China trade tensions remain a risk,"
said Han Tan, market analyst at FXTM.
U.S. President Donald Trump said on Monday he opposed
renegotiating the U.S.-China "Phase 1" trade deal signed in
January, adding he wanted to see if Beijing lived up to the deal
to massively increase purchases of U.S. goods. "New or heightened tariffs before the U.S. elections in
November could derail the global economy's already-fragile
post-COVID-19 recovery and trigger heightened volatility in the
FX markets," Tan added.
"Enveloping this entire narrative is the fact that China's
primary export markets are not buying as the world remains in a
state of lockdown," said Stephen Innes, chief global market
strategist at Axicorp.
In a spot of relief for other Asian units, new infections
were held in check and economies reopened, prompting market
participants to scale back bearish bets on the currencies, the
poll showed.
Investors were on the verge of turning bullish on the Thai
baht THB=TH as fresh cases dwindled. On Wednesday, the country
reported no new daily cases for the first time in two months,
prompting the government to consider easing curbs further.
Participants in the poll turned bullish on the Philippine
peso PHP=PH for the first time since early March as
restrictions were lifted, with curbs extended into June only in
some cities that are hotspots. Bearish bets on the Indian rupee INR=IN were also trimmed
to their lowest in over two months after the country announced a
$266 billion support package involving a major extension of
credit lines to businesses, while the country slowly eased
curbs. Short positions were trimmed on the Malaysian ringgit
MYR=MY , Indonesian rupiah IDR=ID and South Korean won
KRW=KFTC and increased marginally on the Singapore dollar
SGD= .

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 TWD=TP , Indian rupee
INR=D2 , Philippine peso PHP=PDSP , 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):

DDMM CNY KRW {{2034|SGD IDIDR TWD INR MYR PHP THB
14/5 0.23 0.57 0.34 0.21 0.00 0.68 0.69 -0.29 0.01
30/4 0.07 0.73 0.24 0.58 0.08 0.84 0.80 0.00 0.38
16/4 0.26 0.71 0.32 0.86 0.19 1.14 0.74 0.23 0.63
02/4 0.67 0.95 0.80 1.55 0.38 1.25 0.85 0.39 1.01
19/3 0.57 1.22 1.18 1.57 0.18 1.22 1.14 0.56 1.23
05/3 0.13 0.67 0.50 0.73 -0.31 0.63 0.56 -0.18 0.93
20/2 0.52 0.74 1.06 -0.54 0.06 0.10 0.34 -0.30 0.75
6/2 0.34 0.61 0.67 -0.60 0.03 0.12 0.01 -0.15 0.37
23/1 -0.45 -0.22 -0.50 -0.86 -0.85 -0.05 -0.39 -0.43 -1.05
9/1 -0.55 -0.13 -0.56 -0.49 -0.63 0.40 -0.24 -0.23 -1.04



(Writing by Rashmi Ashok and polling by Anushka Trivedi in
Bengaluru; Editing by Devika Syamnath)

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