* Rupee bears return as election euphoria fades
* China's yuan sees short bets unwind slightly
* Baht solitary regional currency with long bets
By Devika Syamnath
June 20 (Reuters) - Investors shaved bearish bets on most
Asian currencies over the past two weeks but went short on the
rupee for the first time in over three months, a Reuters poll
showed, as election euphoria faded against the backdrop of
slowing growth in India.
Investors had turned bullish on the rupee INR=IN in March
for the first time in nearly a year when billions of dollars
worth of foreign funds poured into India ahead of general
election in the world's biggest democracy.
With the election done and dusted, inflows have tapered off,
the central bank has cut interest rates for the third time this
year and Fitch Ratings posited another 25 basis point cut in
2019. "My base case on India is that growth will slow this year
and that it will weigh on the INR," SEB Chief EM Strategist Per
Hammarlund told the Reuters Global Markets Forum on Wednesday.
Bets on the rupee turned bearish for the first time since
late February, a poll of 14 respondents showed.
"There is a relatively large risk/possibility that the new
Modi administration kick-starts the reform agenda again. If they
do, I think it is the only way that the INR can recover."
Prime Minister Narendra Modi secured a second term after a
landslide election victory last month, and the government's main
think tank has hinted at 'big-bang' economic reforms to please
foreign investors, unlock growth and prop up employment.
(For an interactive graphic on foreign flows into India,
click https://tmsnrt.rs/2N1QtKw)
Short bets were trimmed for most other regional currencies
on perceived weakness in the greenback as the U.S. Federal
Reserve firmly leans towards policy easing. However, nervousness
over the lingering U.S.-Sino trade war kept bullish bets in
check.
Diplomatic talks were rekindled between leaders of the two
countries on Wednesday, though most doubt a breakthrough deal
will be reached when U.S. President Donald Trump meets Chinese
President Xi Jinping at the G20 summit in Osaka next week.
All 13 participants in the poll were bearish on the Chinese
yuan CNY=CFXS , cautioned by weak economic data following the
drawn-out trade war saga.
Short bets on the South Korean won KRW=KFTC and the Taiwan
dollar TWD=TP unwound slightly but stayed in bear territory.
The U.S. scrutiny of Chinese technology companies has hurt
demand for electronic parts that are a key export for these
economies.
The Philippine peso PHP= saw bearish bets strengthen
slightly, a poll of 12 respondents showed. The central banks of
both Indonesia and the Philippines are expected to announce
their policy decisions later on Thursday.
The Philippines is seen cutting rates for the second meeting
in a row, according to a Reuters poll that suggested it would be
a close call as policymakers try to strike a balance between
supporting growth and curbing inflation pressures. A poll of 13 respondents showed bearish bets ease on the
Indonesian rupiah IDR=ID . Bank Indonesia is expected to keep
its benchmark interest rate steady, a Reuters poll showed.
The Thai baht THB=TH has been the best performing regional
currency this year and bucked the wider trend in this poll to
see long positions strengthen. Investors bet on its relatively
strong economic fundamentals backed by strong exports,
manufacturing and local consumption.
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
SGD= , Indonesian rupiah, Taiwan dollar, Indian rupee,
Philippine peso, Malaysian ringgit MYR= 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
6/20 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
23/5 1.28 1.69 1.01 0.84 1.14 -0.32 1.17 0.60 0.41
09/5 0.26 1.29 0.29 0.07 0.44 -0.28 0.67 -0.03 0.29
25/4 -0.35 0.65 -0.08 -0.29 0.25 -0.48 0.33 -0.13 0.02
11/4 -0.30 0.51 -0.28 -0.07 0.26 -0.67 -0.10 -0.03 -0.15
28/3 -0.59 0.3 -0.32 0.21 0.16 -0.58 -0.32 0.22 -0.57
14/3 -0.66 0.47 -0.25 0.05 0.38 -0.21 -0.13 -0.13 -0.52
28/2 -0.68 0.17 -0.66 -0.86 0.59 0.08 -0.35 -0.49 -1.36
14/2 -0.48 0.18 -0.39 -0.59 0.39 0.35 -0.43 -0.29 -1.2
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An Affair To Remember: Indian election and inflows png https://tmsnrt.rs/31Byr54
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