Bears Dominate Asia FX: Rupee Faces Mounting Short Bets, Peso Sentiment Sours, Baht Longs Lose Steam

Image Source : iStock

Investor sentiment has shifted sharply across key Asian currencies, with short positions ramping up on the Indian rupee and Philippine peso, while optimism around the Thai baht has cooled significantly, according to the latest Reuters FX positioning poll.

Indian Rupee Sees Surge In Bearish Positions

* Short bets on the Indian rupee have risen to their highest levels in nearly three months

* Investors are reacting to persistent foreign outflows and a strong US dollar driven by hawkish Fed guidance

* Despite robust domestic fundamentals, traders remain cautious due to global risk aversion and high oil prices

* The rupee has recently hovered near the 83.50 mark, under pressure from rising US yields and cautious RBI intervention

Philippine Peso Faces Renewed Pressure

* Bearish bets on the Philippine peso have re-emerged after a nearly three-month break

* Weak exports, widening trade deficit, and uncertain monetary policy stance have weighed on sentiment

* The peso has slipped past the 58-per-dollar level, prompting concerns about imported inflation and capital flight

* The Bangko Sentral ng Pilipinas has limited room to hike rates, adding to currency vulnerability

Thai Baht Long Bets Ease Significantly

* Long positions on the Thai baht have dropped sharply as investor confidence weakens

* Concerns over weak Chinese demand, soft Thai exports, and limited tourism recovery have impacted the outlook

* The baht has been volatile around the 36 per dollar range amid shifting global risk sentiment

* Analysts also cite delays in fiscal stimulus and political noise as factors reducing near-term enthusiasm

Regional FX Outlook And Market Drivers

* The US Federal Reserve’s rate outlook and dollar strength remain dominant drivers for Asia FX positioning

* Oil prices, geopolitical risks, and global equity flows are adding volatility across emerging market currencies

* Market watchers expect central banks in Asia to intervene selectively, focusing on stability over competitiveness

* A risk-on shift or clarity on US monetary easing could trigger a reversal in these short-term trends

About Reuters FX Poll

The Reuters FX poll tracks investor positioning across Asian currency markets using insights from fund managers, traders, and analysts. It provides a snapshot of market sentiment and expectations based on recent macroeconomic trends and monetary policy cues.

Sources: Reuters, Bloomberg, Business Standard, Economic Times, Mint