SINGAPORE: Sentiment on most emerging Asian currencies turned bearish in the last two weeks as caution grew over the possibility of an earlier-than-expected US interest rate rise, while bullish bets on the Chinese yuan increased, a Reuters poll showed.
Long positions in the yuan rose to their largest level since late January, according to a survey of 12 analysts conducted between Tuesday and Thursday.
The renminbi earlier this week hit six-month highs as the central bank set its midpoint guidance stronger after a record high trade surplus in August.
Most emerging Asian currencies, however, suffered from growing expectations that the Federal Reserve may raise interest rates earlier than expected on a solid US economy.
On Monday, the San Francisco Fed report noted that investors were pricing in a lower trajectory for rate rises than members of the Fed itself.
That sparked some speculations that the US central bank may signal an earlier rate hike in its policy meeting next week.
Sentiment on the Singapore dollar was the hardest hit among emerging Asian currencies with short positions at their largest since May 2013.
The city-state's currency on Wednesday hit a near six-month low on growing concerns over an economic slowdown. Economists have cut their Singapore 2014 economic growth forecast to a median 3.3 percent from a 3.8 percent prediction made three months ago, a central bank survey showed.
Views on the South Korean won also turned bearish, for the first time since late March. Offshore hedge funds pushed the won to a near five-week low against the dollar on Thursday.
The Malaysian ringgit suffered the largest short positions since late January amid worry the economy may lose steam after disappointing July exports and industrial output.
Sentiment on the ringgit had been optimistic since late February on solid economic growth and as the central bank in July announced its first rate hike in more than three years.
Views on the Indonesian rupiah grew pessimistic while sentiment on the Thai baht turned bearish with short positions at their highest since early June.
The Philippine peso also saw the first short positions in nearly five months, but its bearish bets were relatively small as the central bank is expected to tighten policy later on Thursday.
Long positions in the Indian rupee and the Taiwan dollar almost disappeared.
In the previous poll published on Aug. 28, sentiment on emerging Asian currencies improved on expectations that the European Central Bank's monetary stimulus would bring more capital inflows to the region.
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).
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