* Investors eye developments on Sino-U.S. trade talks
* Positions held on China's yuan
* Bullish bets on Thai baht raised to highest since Aug. 1
By Nikhil Nainan
BENGALURU, Oct 10 (Reuters) - Investors held onto their
positions on Asian currencies in the past two weeks, a Reuters
poll showed, due to uncertainty over the outcome of renewed
Sino-U.S. trade negotiations.
Two weeks ago, investors eased short positions on currencies
of trade-reliant Asian economies on hopes of a trade deal.
However, those expectations largely faded earlier this week as
tensions ramped up ahead of high-level talks that begin on
Thursday.
Optimism that the two sides could reach a truce were dealt a
blow after U.S. President Donald Trump's administration
introduced visa restrictions on Chinese officials and added more
Chinese companies to a U.S. trade blacklist. But investors are clinging to hopes of a partial deal, which
seems more likely than a broad agreement, as both economies show
signs of slowing down.
"We are getting more news, but nothing is ever concrete
anymore," said Nick Twidale, a director & co-founder of
Sydney-based trade finance provider Xchainge.
"We've just had this sentiment fatigue."
The poll closed on Wednesday, a day before reports suggested
that the United States and China may settle some of their
disputes, but that the Chinese delegation was planning to cut
short its visit to Washington. Short positions were little changed on the Chinese yuan
CNY=CFXS , the South Korean won KRW=KFTC and the Singapore
dollar SGD= , a poll of 14 respondents showed, as the
unpredictable nature of the tit-for-tat trade war kept some
market participants from making any big bets.
"Risk is still skewed towards defensive positioning
especially in the options space but markets are cautious on
adding to cash positions due to unpredictability of politics,"
said a Hong Kong-based trader, who did not wish to be named.
Singapore's central bank is set to ease monetary policy at
its semi-annual meeting on Monday, a separate Reuters poll
showed, with the economy likely escaping a technical recession
in the third quarter. Taiwan has been one of the few beneficiaries of the trade
war and investors remained bullish on its dollar TWD=TP . The
trade-reliant economy has benefited from supply chain
diversification as businesses look to avoid tariffs elsewhere.
Among Southeast Asian currencies, participants upped their
short bets on Indonesia's rupiah IDR= , though only marginally,
while bets on the Philippine peso PHP= were scaled back
further to their lowest since mid-August.
Earlier this week, Philippine's central bank governor said
there may be no more rate cuts this year. "Given the flushed liquidity in Asia and more potential
easing from Fed, I'd expect markets to continue to find
opportunities to re-enter low beta or low duration trades," said
the Hong Kong-based trader, referring to the rupiah, peso and
Taiwan dollar.
Long positions on the Thai baht THB=TH rose slightly to
their highest since the start of August, posing a worry for the
export-reliant economy. 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 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 ASIAPOSN are provided below (positions
in U.S. dollar versus each currency):
DDMM CNY KRW {{2034|SGD IDIDR TWD INR MYR PHP THB
10/10 0.82 0.88 0.59 0.08 -0.06 0.39 0.55 0.20 -0.80
26/9 0.84 0.91 0.51 0.01 -0.05 0.34 0.56 0.34 -0.77
12/9 0.95 1.13 0.63 -0.12 0.28 0.78 0.37 0.39 -0.52
29/8 1.51 1.68 1.17 0.45 0.78 0.85 0.81 0.60 -0.73
15/8 1.09 1.41 0.99 0.33 0.47 0.17 0.59 0.16 -0.68
01/8 0.37 1.04 0.65 -0.33 0.46 -0.49 -0.07 -0.45 -0.85
18/7 0.20 0.88 0.10 -0.46 0.36 -0.35 0.02 -0.38 -1.00
4/7 0.55 1.02 0.15 0.03 0.54 -0.15 0.67 -0.19 -1.19
20/6 1.21 1.33 0.78 0.41 1.21 0.13 1.10 0.45 -0.53
6/6 1.23 1.53 0.93 0.64 1.30 -0.01 1.18 0.40 -0.11
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Poll: Asia's emerging market currencies http://fingfx.thomsonreuters.com/gfx/rngs/ASIA-FX/0100214E2S7/index.html
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