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Investors more bullish on yuan, short bets on Thai baht ease: Reuters poll -Breaking

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© Reuters. This illustration photo shows a China yuan bill. It was taken May 31, 2017. REUTERS/Thomas White/Illustration

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Shashwat Awasthi

(Reuters) – Bullish bets in the Chinese yuan reached a record five-month high despite the risks posed by a slowing real estate sector. Meanwhile, investors began to unwind their bearish position in the Thai baht due to the possibility of an economic recovery, according to Reuters poll.

Market participants continued to be bearish on Singapore dollars, as indicated by the poll of 10 respondents.

The yuan’s long positions consolidated, and they were at their highest level since June. They are supported by strong industrial output and data on retail sales from China’s world-second largest economy.

This helped to shift the focus away from China Evergrande Group’s debt problems and other real-estate companies, which still impact China’s economic growth and negatively affect its outlook.

Following a virtual meeting between U.S. President Joe Biden (China) and Xi Jinping (China), China’s frosty relations to the United States seemed to start showing early signs of thawing.

Traders claimed that the meeting increased the likelihood of partial tariff reductions. After which, the yuan rose to a 5-1/2-month peak.

Thailand, where things are looking good after a severe coronavirus-driven decline last year is seeing a reopening tourism sector that has raised hopes for an economic revival.

One of the poorest performing currency in the region, the baht, was relegated to short-term bets.

Chua Han Teng from DBS said that while Thailand has seen the end of the tunnel, the economic recovery will likely take place slowly.

He said that consumer and business confidence had begun to gain from the looser virus curbs. However, they still have room to improve from weaker levels. He also stated that it would take some time for tourism to return to pre-pandemic levels.

This cautious outlook was echoed by Tuesday’s findings from a university survey, which found that the economy will recover in the second half 2022. However, there are still concerns over new COVID-19 epidemics and curbs.

Investors increased their long positions in the Indonesian rupiah, but remained moderately bearish about the Philippine peso. Both countries’ central banks will meet on Thursday to discuss interest rates and they are likely to keep them unchanged.

The Reuters survey focuses on the market position of nine emerging Asian currencies. This includes the South Korean won and Chinese yuan as well as the Singapore dollar, South Korean won, South Korean won, Indonesian rupiah (IDR), Taiwan dollar, Indian rupee, Philippine Peso, Malaysian ringgit, and the Thai baht.

This poll estimates net short and long positions using a scale from minus 3 to plus 3.

Plus 3 is an indication that the market has a significant amount of U.S. dollar. Figures include positions in non-deliverable futures (NDFs).

Below are the survey results ASIAPOSN (positions in U.S. dollars versus each currency).

DATE

18-Nov-21

-0.87 0.48 0.07 -0.72 -0.15 0.08 -0.04 0.24 0.12

04-Nov-21 -0.51 0.63 -0.09 -0.41 0.1 0.54 -0.07 0.27 0.66

21-Oct-21 -0.55 0.91 -0.27 -1.12 0.3 0.7 0.1 0.44 1.1

09-Oct-21 0.27 1.35 0.2 -0.29 0.28 0.1 0.3 0.84 1.2

23-Sep-21 0.25 0.96 -0.15 -0.5 -0.2 -0.45 0.25 0.56 0.75

09-Sep-21 -0.09 0.33 -0.36 -0.44 -0.69 -0.88 0.23 0.4 0.12

26-Aug-21 0.425 0.868 0.474 0.18 0.326 -0.08 1.192 0.779 1.351

12-Aug-21 0.32 0.69 0.77 0.2 -0.09 0.37 1.39 1.17 1.75

29-July-21 0.27 0.78 0.71 0.27 0.36 0.29 1.4 1.21 1.49

15-July-21 -0.15 0.27 0.53 0.23 0.13 0.68 1.06 1.06 1.56

01-July-21 -0.29 -0.29 0.02 0.36 -0.19 0.5 0.49 -0.04 0.85

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