(Reuters) – A Reuters poll found that short positions on China’s yuan went down as a result of more stimulus and looser COVID-19 restrictions, while bearish bets on the Philippine peso went up because the central bank took a more moderate approach than its peers to tamp down inflation.
Short bets on the peso were at their highest level in at least four years because people were worried that the central bank’s 25-basis-point rate hike this month won‘t help stop inflationary pressures. A poll of 10 people every two weeks showed this on Thursday.
The pressure has done a lot of damage to the peso this year. So far, it has lost nearly 7% of its value and remains close to a 16-and-a-half-year low.
The incoming governor of Bangko Sentral ng Pilipinas said the bank might consider bigger rate hikes to help the peso, but it won’t have to match the U.S. Federal Reserve’s tightening of policy.
Analysts at Bank of America (NYSE: BAC), on the other hand, say that “a gradual rate of tightening may be appropriate as the economy’s recovery and reopening remain fragile.”
Bears in the yuan, on the other hand, pulled back because they thought that easing COVID-19 restrictions would help the economy recover. Even though the People’s Bank of China hinted at a more flexible policy, it was thought that it wouldn’t have much of an effect on the unit.
The central bank also reaffirmed its plan to make the yuan exchange rate more flexible and keep the currency stable.
Bets against the Indonesian rupiah went up a little bit. Last week, Bank Indonesia kept rates at a record low and kept its dovish stance. Analysts worry that this will cause the currency to weaken.
The Indian rupee, which hit a record low on Wednesday, was also bad news for the market. This was because people were still worried about fast inflation, higher oil prices, and slow growth.
At least four years have passed since the last time this happened.
Dealers began to like Singapore’s dollar a little bit more. In May, the city-main state’s measure of consumer prices rose at the fastest rate in more than a decade. It is expected to reach its peak in the third quarter, at around 4%.
Bearish bets on the South Korean won and the Malaysian ringgit went down a little bit, but they went up a little bit on the Thai baht.
The Asian currency positioning poll asks analysts and fund managers what they think the current market positions are for nine Asian emerging market currencies: the Chinese yuan, the South Korean won, the Singapore dollar, the Indonesian rupiah, the Taiwan dollar, the Indian rupee, the Philippine peso, the Malaysian ringgit, and the Thai baht.
In the poll, net long or short positions are estimated on a scale from -3 to +3. A score of +3 means that the market has a lot of U.S. dollars on hand.
The numbers include positions held through forwards that can’t be delivered (NDFs).
The results of the survey are listed below (in terms of the U.S. dollar’s value against each currency):
DATE USD/C USD/
TWD ININR MYR PHP HB NY KRW GD DR 2074
30-June-22 1.09 1.69 1.08 1.5 1.15 1.8 1.63 2.05 1.39
16-June-22 1.54 1.79 1.35 1.33 1.23 1.66 1.67 1.7 1.34
02-June-22 1.22 0.56 0.38 0.90 0.73 1.18 1.06 0.59 0.54
19-May-22 1.90 1.55 1.07 1.19 1.63 1.35 1.53 1.15 1.56
05-May-22 1.75 1.50 0.73 0.56 1.49 1.04 1.47 1.09 1.33
21-April-22 0.10 1.07 -0.17 -0.03 0.94 0.75 0.89 1.00 0.71
07-April-22 –0.41 0.99 -0.46 -0.05 0.81 0.63 0.32 0.53 0.31
24-March-22 -0.16 0.98 0.19 0.04 1.16 0.99 0.12 1.40 0.46