Bearish bets soften on Asian FX as US dollars eases

Investors trimmed bearish bets on most Asian currencies. This is because the dollar weakened on hopes of a temporary pushback in the Federal Reserve’s tapering timeline, while sentiment on the Indian rupee turned marginally bullish. Investors unwound their bearish bets on the Indian rupee to be slightly bullish. 0.2% in August were appreciated by the currency after vaccination programs were ramped up and the central bank continued its monetary policy support.

Economic growth in India is expected to touch a record high. Despite the drawback from the deadly second virus wave, there is a rebound expected in the consumer spending. Short bets were largely trimmed on the Malaysian ringgit, the Philippine peso, and the Thai baht. The U.S. dollar has eased 0.4%. It also slipped from a 9-month high. Bearish bets on the Malaysian ringgit were at their lowest since mid-July. 1% has been appreciated by the currency in the past two weeks after the arrival of a new Prime Minister. Short bets on the baht were at their lowest since July. The worst-performing unit in the region so far, can be claimed by this.

On the other hand, the rising infections in the region, and the increased pressure of vaccinations around South Korea, India, and Thailand, while China is keeping on witnessing new outbreaks too. In the meantime, short bets on the Chinese yuan in the last two weeks has been increased. This is because of the latest virus outbreak’s pressure on the economic activity. South Korean won’s bearish bets ticked higher as the currency hit its lowest since September 2020. On the Taiwanese dollar, investors turned bearish once again. The current market positions in nine Asian emerging market currencies such as are the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht is being considered on a poll.