Harshita Swaminathan

(Reuters) – Investors remained bearish on emerging Asian currencies, and went short on Thailand’s baht the first time since three months. This was due to uncertainty over Russia’s invasion in Ukraine and rising inflationary risks, according to a Reuters poll.

They held onto long bets even though they dropped to near six month’s lowest, while short bets rose in the Philippines peso as well as the Malaysian rupee, according to a poll of 13 respondents.

As a result of rising COVID-19 infected in China, market participants were reluctant to trade the baht. Additionally, the sentiment that the country is a net energy importer was also hurt by the rise in commodity prices.

The currencies of the region were largely stable after the U.S. Federal Reserve increased interest rates 25 basis points to support the dollar and officials indicated that they would take more drastic measures to curb inflation.

The bearish mood was also influenced by rising oil prices. Although crude oil has fallen from its peak earlier in the month, it is still high enough to pose a threat of bigger trade deficits as well as greater price-pull inflation.

Singapore’s headline price rose at the fastest pace in 9 years on Wednesday. Central banks in Indonesia, Philippines and Indonesia have also noted that there are risks associated with supercharged rates.

“Despite war’s backdrop, we expect inflation to drive the macro outlook… The inflation rate will see an additional lift at the very least for a few more months,” Ajay Rajadhyaksha is global chair of research. Barclays Note: (LON)

According to investors, they believe that the Fed and central banks will not need to go into recessions to reduce inflation. This is our opinion. The risks today are much higher than they were a month ago.

Analysts from ING indicated in a note Wednesday that they believe the Monetary Authority of Singapore will resort to tightening its monetary policy at its meeting in April.

The short-term bets on the currencies of major oil exporters in the region, such as India, were the most high. However, they fell significantly for Indonesian oil exporter Indonesia.

It has been under increased pressure as well. The yuan had appeared to be a safe-haven option in the early days of Russia-Ukraine conflict.

However, rising COVID cases may mean that the government might provide additional stimulus to help the currency.

Although the Taiwanese central bank surprised markets by raising interest rates last week, bearish positions in Taiwan’s dollar reached their highest levels since June 2019.

Our Asian currency positioning survey focuses on how analysts and fund managers think the markets are currently positioned in nine emerging Asian currencies. These include the South Korean won, Chinese yuan and South Korean won.

This poll measures net short and long positions using a scale of 3-3 to 3. Scores above 3 indicate that the market is significant long in U.S. Dollars.

These figures also include the positions that were held by non-deliverable forwards.

These are the results of our survey (positions in U.S. Dollar versus each other):

DATE USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/USD/

{{SGD ID – 2034|SGD ID

24-Mar -0.1 0.98 0.19 0.04 1.16 0.99 0.12 1.4 0.46

-21 6

09-Mar -0.8 1.22 0.8 0.49 0.97 1.10 0.05 0.89 -0.0

-22 5 8

24-Feb -0.9 0.39 -0.7 -0.0 0.33 0.07 0.20 0.19 -1.0

-22 9 7 1 7

10-Feb -0.9 0.85 -0.9 0.46 -0.1 0.32 0.10 0.74 -0.3

-22 9 8 8 1

27-Jan -1.2 0.89 -0.6 0.12 -0.1 0.18 0.25 0.82 0.00

-22 9 7 7

13-Jan -0.7 0.97 0.22 0.20 -0.1 -0.2 0.28 0.71 0.61

-22 3 5 9

16-Dec -1.0 0.53 0.67 0.54 0.09 1.07 0.84 0.20 0.36

-21 7

02-Dec -0.8 1.06 0.58 0.15 0.00 0.47 0.28 0.26 0.71

-21 8

18-Nov -0.8 0.48 0.07 -0.7 -0.1 0.08 -0.0 0.24 0.12

-21 7 2 5 4

04-Nov -0.5 0.63 -0.0 -0.4 0.10 0.54 -0.0 0.27 0.66

-21 1 9 1 7