Bears maintain grip on oil-importing Asian currencies as crude prices bite: Reuters poll

Investors remained bearish on most emerging Asian currencies, according to a Reuters poll released on Thursday. High oil prices, which have inflated external balance concerns in net energy-importing economies, and rising U.S. yields bolstered the dollar's appeal. Short positions on the Indonesian rupiah surged to the highest level since late July, while bearish bets on the Philippine peso, Thailand's baht, and India's rupee persisted, a survey of 10 respondents revealed.

The U.S. 30-year Treasury yield hit a 22-year high last week as more Federal Reserve officials signaled potential further tightening to combat inflation. Higher oil prices could erode the current-account buffers of oil-importing economies, while widening yield differentials favoring the dollar have made their currencies less attractive to investors, said Jeff Ng, head of Asia macro strategy at SMBC.

The Indian rupee, Philippine peso, and Thai baht were identified as the most vulnerable currencies. Short positions on the rupiah and baht were at their highest since late July. The Thai baht's lack of policy rate support further compounded its struggles, as the Bank of Thailand's rate stands at just 1%. Bearish views on the Indian rupee reached the highest level since early June due to the currency's exposure to rising oil prices and surging global bond yields, although central bank interventions mitigated its losses.

Bullish sentiment on the South Korean won remained strong for the fifth consecutive survey, driven by robust AI-related chip exports and a current-account surplus, bolstering confidence in the won. Despite its recent surge over 5% against the dollar, the won is one of only three emerging Asian currencies in positive territory, alongside the Singapore dollar and Chinese yuan.

The Malaysian ringgit stayed resilient due to Malaysia's status as a net energy exporter, benefiting from higher oil and gas prices that weigh on its import-dependent neighbors. Bullish bets on the Chinese yuan extended their year-long run, while long positions on the Singapore dollar remained consistent since early August. The Asian currency positioning poll assesses the current market positions of nine emerging Asian market currencies, with scores ranging from -3 (signaling significant shortness in U.S. dollars) to +3. The survey figures encompass positions held through non-deliverable forwards (NDFs).