Confidence returns on Asian forex; biggest bets on ringgit since October 2010

Investors regained optimism on most emerging Asian currencies in the past two weeks, nearly tripling bets on the Malaysian ringgit and the Thai baht, while they became almost neutral on the Indonesian rupiah, a Reuters poll showed on Thursday. Currency players added positions in the ringgit, taking them to their largest since October 2010, while nearly quintupling bets on the Singapore dollar, according to the survey of 12 currency analysts conducted on Wednesday and Thursday.
Investors increased holdings in the South Korean won by 50 percent. At the time the latest survey was conducted, there was optimism about new inflows to Asia because the European Central Bank had just pumped 530 billion euros of fresh cheap money into banks. In the previous poll published on February 16, investors slashed bets on emerging Asian currencies due to doubts over the implementation of unpopular Greek austerity measures to ease the country's debt problems.
Emerging Asian currencies have benefited from liquidity boosts stemming from policy easing by major central banks to support growth. But investors continued to cut positions in the rupiah on worries about inflation. The Indonesian currency has been the worst performer among emerging Asian currencies so far this year, hit by bond outflows.
The Reuters survey focused on what analysts believe are the current market positions in nine Asian emerging market currencies: Chinese yuan, won, Singapore dollar, rupiah, Taiwan dollar, rupee, Philippine peso, 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 on dollars. The figures included positions held through non-deliverable forwards (NDFs).