SINGAPORE: Investors sharply reduced their bullish bets on the South Korean won over the last two weeks, while turning slightly bullish on the Indonesian rupiah for the first time since May, a Reuters poll showed.
Long positions in the won fell sharply compared to the previous survey in early July, when investors increased their bullish bets in the South Korean currency to the largest since January 2013.
While the poll showed that investors were still bullish on the South Korean won, sentiment fell to the weakest since late March, when investors were slightly bearish on the currency.
After hitting a six-year high against the dollar in early July due to capital inflows and a continuous current account surplus, the won has retreated over the past two weeks.
It touched a 2-1/2 month low versus the dollar earlier this week, dented by policymakers' comments that appeared to raise the chances of an interest rate cut.
South Korea's new finance minister and its central bank governor both highlighted weakness in Asia's fourth-largest economy on Wednesday, adding to market expectations that an interest rate cut could be in the offing.
Bets on the Indonesian rupiah turned slightly bullish, the first such positioning in the currency since May.
The rupiah had rallied strongly last week, buoyed by expectations that Joko "Jokowi" Widodo would become Indonesia's next president.
Investors are betting on a Jokowi win based on unofficial tallies from quick polls.
Both Jokowi and his rival, former general Prabowo Subianto, have claimed victory in the election held on July 9, and the Elections Commission is to announce the official result by July 22.
Bets on the Thai baht turned slightly bullish, the first positioning like that in the baht since October.
The baht has edged higher over the past few weeks and has risen by about 2.3 percent from a trough hit in early June, having gained as Thailand's political tensions eased after the military took power in May to end months of turmoil.
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, 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 US dollars. The figures included positions held through non-deliverable forwards (NDFs).
Comments
Comments are closed for this article.