Short positions on the Malaysian ringgit and Philippine peso hovered near multi-year lows, while bets turned largely neutral on the Thai baht and Taiwanese dollar, according to a fortnightly poll of 12 analysts.
"Rates are being pressured lower by growing recession angst," analysts at ING bank said.
"Market reaction is increasingly sensitive to weaker data... and markets are focused on what lies beyond the peak of the current hiking cycle," they added.
Poll respondents also scaled back short bets on China's yuan to their lowest in over five years, as services activity in March revved up at the fastest pace in 2-1/2 years on robust new orders and job creation and a consumption-led post-COVID recovery.
Appetite for high-risk Asian assets have been bolstered by a weakness in the greenback. [USD/]
"There are growing signs of a strong economic recovery in China - this will bode well for the region, with the yuan becoming a tailwind for, rather than a drag on Asian currencies this year, at a time when the USD's safe-haven bid has weakened," Irene Cheung, senior Asia strategist at ANZ in Singapore, said in a note.
A slew of weak economic data this week from the world's largest economy undermined the dollar and strengthened the case for the U.S. Federal Reserve to consider taking a breather in its aggressive rate hike path adopted to fight rampant inflation.
Meanwhile, analysts turned slightly bullish on Singapore's dollar, with the city-state expected to tighten monetary policy this month, for the sixth time in a row, as price pressures in the Asian financial hub continue due to global supply chain disruptions.
"The combination of slowing domestic demand, base effects and the cumulative impact of previous tightening are likely to sap price pressures over the course of the next few months," said Nicholas Mapa, an economist at ING bank, in reference to the Singapore dollar.
The poll also showed short bets on the Indian rupee easing. All 12 responses to the poll were received before the Reserve Bank of India (RBI) surprised markets by holding its key repo rate steady on Thursday after six consecutive hikes.
The Asian currency positioning poll is focused on what analysts and fund managers 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 U.S. dollars.
The figures include positions held through non-deliverable forwards (NDFs).
The survey findings are provided below (positions in U.S. dollar versus each currency):
DATE USD/CNY USD/KRW USD/SGD USD/IDR USD/TWD USD/INR USD/MYR USD/PHP USD/THB
06-Apr-23 0.04 0.56 -0.39 -0.26 -0.03 0.3 0.29 0.08 -0.06
23-Mar-23 0.17 0.87 0.16 0.74 0.63 0.58 0.74 0.36 0.37
09-Mar-23 0.68 1.3 0.65 0.56 0.78 0.28 0.78 0.42 0.3
23-Feb-23 0.36 0.77 0.21 0.12 0.3 0.8 0.49 0.33 0.37
9-Feb-23 -0.8 -0.63 -0.72 -0.53 -0.68 0.25 -0.64 -0.4 -1
26-Jan-23 -1.29 -1.14 -1.4 -1.15 -0.68 -0.47 -1.25 -0.78 -1.77
12-Jan-23 -1.58 -1.39 -1.31 -0.1 -0.67 0.07 -0.82 -0.61 -1.85
15-Dec-22 0.08 -0.55 -0.85 0.92 -0.22 0.63 -0.36 -0.15 -0.69
1-Dec-22 0.63 -0.15 -0.3 1.08 0.15 0.76 -0.02 0.33 -0.16
17-Nov-22 0.74 0.21 -0.06 1.06 0.84 1.13 1.18 0.89 0.4
(Reporting by Riya Sharma in Bengaluru; Editing by Nivedita Bhattacharjee)
By Riya Sharma
