New Delhi: Investors switched to long positions on the rupee for the first time since September, on hopes that the economy might be able to withstand Omicron’s worst bounce and bet that the price hike in US rates will be substantially lower. up to, a Reuters poll found.
Broadly speaking, investors on most Asian emerging currencies remained bearish, a survey of 12 respondents showed, as Omicron’s spread threatens to slow the sector’s recovery, although, so far, emerging equities remain fairly resilient.
High inflation in the United States may also signal federal Reserve To speed up their interest rates, the central bank indicated in December that they may raise rates three times this year.
Analysts at Barclays said earlier this week, “While these are unfavorable conditions, we don’t think the market is overly satisfied as the risk is moderate (O’Micron) and/or already being substantially priced at (Federal Reserve).” is likely to.”
So far in India, which is in the middle of the third wave of the COVID-19 pandemic, states have imposed some restrictions on daily life, but have not implemented the economically damaging lockdowns seen in previous waves.
Asia’s third-largest economy grew at the fastest pace for any major economy between July and September, as businesses reopened and government spending strengthened.
Barclays said it does not see a tighter Fed policy due to better US growth performance, boosting dollar strength and prolonged holding on the rupee. The rupee has gained close to 3% since mid-December.
Even in Indonesia, whose bond markets are sensitive to foreign inflows, the rupee has not been very volatile.
Traders reduced their small bets on the rupee as local demand improved and vaccination rates increased.
Standard Chartered said in a note that the higher vaccination rates and data suggesting the Omicron variant is less severe than other variants could allow the Indonesian economy to open up further.
It expects the rupee to rise to 14,000 by the end of the first quarter. The currency was traded around 14,305 on Thursday.
Elsewhere, investors increased their bets on the Philippine peso and Thai baht and lowered their bets on the Singapore dollar and Malaysian ringgit.
The Asian Currency Position Survey focuses on what analysts and fund managers believe are the current market conditions 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 that the market is long enough for the US dollar.
These figures include positions held through non-deliverable forwards (NDFs).
Below are the findings of the survey (positions in each currency versus the US dollar).
Broadly speaking, investors on most Asian emerging currencies remained bearish, a survey of 12 respondents showed, as Omicron’s spread threatens to slow the sector’s recovery, although, so far, emerging equities remain fairly resilient.
High inflation in the United States may also signal federal Reserve To speed up their interest rates, the central bank indicated in December that they may raise rates three times this year.
Analysts at Barclays said earlier this week, “While these are unfavorable conditions, we don’t think the market is overly satisfied as the risk is moderate (O’Micron) and/or already being substantially priced at (Federal Reserve).” is likely to.”
So far in India, which is in the middle of the third wave of the COVID-19 pandemic, states have imposed some restrictions on daily life, but have not implemented the economically damaging lockdowns seen in previous waves.
Asia’s third-largest economy grew at the fastest pace for any major economy between July and September, as businesses reopened and government spending strengthened.
Barclays said it does not see a tighter Fed policy due to better US growth performance, boosting dollar strength and prolonged holding on the rupee. The rupee has gained close to 3% since mid-December.
Even in Indonesia, whose bond markets are sensitive to foreign inflows, the rupee has not been very volatile.
Traders reduced their small bets on the rupee as local demand improved and vaccination rates increased.
Standard Chartered said in a note that the higher vaccination rates and data suggesting the Omicron variant is less severe than other variants could allow the Indonesian economy to open up further.
It expects the rupee to rise to 14,000 by the end of the first quarter. The currency was traded around 14,305 on Thursday.
Elsewhere, investors increased their bets on the Philippine peso and Thai baht and lowered their bets on the Singapore dollar and Malaysian ringgit.
The Asian Currency Position Survey focuses on what analysts and fund managers believe are the current market conditions 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 that the market is long enough for the US dollar.
These figures include positions held through non-deliverable forwards (NDFs).
Below are the findings of the survey (positions in each currency versus the US dollar).
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