News Hour: Optimism on rupee near 8-month high: Poll

SINGAPORE: Bullish bets on the rupee hit a near eight-month high and optimism on the Chinese yuanrose to its highest level in five months over the last two weeks, even as investors slashed long positions in most emerging Asian currencies, a Reuters poll showed. 

Long positions in the rupee climbed to their largest level since early February, the survey of 11 analysts showed on Thursday, as investors hailed the government's fast-tracked fiscal and economic reforms.

On Monday, the rupee soared to its strongest reading versus the US dollar in more than four months. The rupee, which had lost as much as 7.4 per cent in late June from the end of 2011, has eased 0.3 per cent so far this year. 

Positive bets on the yuan increased to their highest level since late April, as investors reduced bearish calls on the currency before a week-long Chinese holiday next week, sending it to a five-month peak versus the greenback. 

But bullish positions in most other emerging Asian currencies were reduced, according to the poll conducted on Wednesday and Thursday. 

Long positions in the Malaysian ringgit were slashed by almost two-thirds and similar bets on the Philippine peso were nearly halved. 

Bearish bets on the Indonesian rupiah quadrupled on sustained dollar demand from local corporates. 

The less optimistic stance on emerging Asian currencies came as investors took profits on recent gains which were spurred by central bank stimulus and refocused their attention on the slowing global economy and the prolonged euro zone debt crisis. 

This is markedly different from the previous poll published on Sept 13 which showed that bullish bets on emerging Asian currencies had been increased after European policymakers announced steps to ease the three-year-old crisis in Europe. 

The Reuters survey focused on what analysts believe are the current market positions in nine Asian emerging market currencies: Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian 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 US dollars. The figures included positions held through non-deliverable forwards (NDFs).
(Source:economictimes.indiatimes.com)