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POLL-Bullish bets on Asian FX hit multi-year highs as 2021 outlook brightens

    * Bullish view on Taiwan dollar highest since October 2009
    * Long bets on South Korean won at near eight-year high
    * Bullish position on Chinese yuan biggest since January
2014

    By Rashmi Ashok
    Dec 10 (Reuters) - Bullish bets on trade-sensitive Asian
currencies rose to multi-year highs, a Reuters poll showed, as
improving exports and expectations of higher capital inflows
buoyed hopes that the region may lead a vaccine-driven economic
recovery in 2021.
    Long positions on the Chinese yuan, seen as the
anchor for other currencies in the region due to strong trade
ties, stood at their highest level since January 2014, the
fortnightly poll of 14 respondents showed.
    Bullish bets on the South Korean won were near an
eight-year high, while those on the Taiwan dollar
jumped to their highest since early October 2009. Long views on
the Singapore dollar hovered near a three-year high. 
    Asian currencies face a "winning trifecta" going into 2021,
said ANZ analysts, noting expected smoother vaccine rollouts in
the region due to relatively better virus containment, and a
likely rise in exports and portfolio inflows.
    For the yuan, in particular, improving external balance,
strong portfolio inflows, wide interest rate differentials and
prospects that the People's Bank of China could be the first
central bank to exit unconventional easing will all help in
2021, they wrote.
    "We still see the yuan as undervalued, and Chinese
authorities have been comfortable in allowing the currency to
appreciate. We forecast CNY to reach 6.30 by the end of 2021,"
they said.
    The yuan has held steady recently despite a spike in
Sino-U.S. tensions, after the United States blacklisted two
major Chinese companies and imposed sanctions on at least a
dozen Chinese officials, prompting Beijing to say it would
retaliate.
    "For the time being, markets may be focusing on COVID-19
vaccine prospects as well as U.S. fiscal stimulus hopes. So,
U.S.-China tensions may come back into play as the Joe Biden
administration gets going," said Daniel Dubrovsky, an analyst at
DailyFX.
    Long bets on the Thai currency rose to their
highest since January but were at relatively lower levels
compared to other export-sensitive currencies, as political
tensions and growing central bank discomfort over the baht's
appreciation weighed.
    The Bank of Thailand (BOT) on Wednesday said it stepped in
to slow volatility in the baht so that it would not derail
economic recovery, after the currency strengthened to a one-year
high of 29 baht per U.S. dollar.
    "Theoretically, the Bank of Thailand could have infinite
room to weaken its currency if it continues to accumulate
foreign exchange reserves," said DailyFX's Dubrovsky, pointing
out that reserves clocked in just shy of an all-time high in
November-end at $254 billion. 
    "The risk for the BOT is to balance its efforts, as sudden
announcements or aggressive intervention could scare away
investors and induce capital flight... it will be pertinent to
keep a close eye on their efforts."

    
    The Asian currency positioning poll is focused on what
analysts and fund managers believe are the current market
positions in nine Asian emerging market currencies: the Chinese
yuan, South Korean won, Singapore dollar, Indonesian rupiah,
Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit
and the 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 the
market is significantly long U.S. dollars.
    The figures include positions held through non-deliverable
forwards (NDFs).
    The survey findings are provided below (positions
in U.S. dollar versus each currency):      
 DD/MM  CNY    KRW    SGD    IDR    TWD    INR    MYR    PHP    THB
 10/12  -1.53  -1.68  -1.11  -0.61  -1.60  -0.20  -0.53  -0.97  -0.87
 26/11  -1.43  -1.29  -1.01  -0.92  -1.08  -0.30  -0.75  -0.80  -0.66
 12/11  -1.28  -1.52  -0.99  -1.01  -1.08  -0.26  -0.44  -0.67  -0.80
 29/10  -0.86  -1.14  -0.49  0.09   -1.23  -0.07  -0.03  -0.09  -0.02
 15/10  -1.07  -0.94  -0.72  0.35   -1.12  -0.44  -0.33  -0.15  0.10
 01/10  -0.47  -0.53  -0.25  0.61   -0.68  -0.31  -0.31  -0.68  0.38
 17/09  -1.25  -0.60  -0.61  0.39   -0.51  -0.54  -0.89  -1.07  -0.17
 03/09  -1.41  -0.71  -0.99  -0.19  -0.40  -0.91  -0.96  -1.34  -0.15
 20/08  -1.02  -0.71  -0.69  0.43   -0.31  -0.35  -0.62  -1.12  -0.21
 06/08  -0.81  -0.44  -0.57  0.45   -0.54  -0.31  -0.29  -0.76  -0.2
 
    

    
 (Reporting by Rashmi Ashok in Bengaluru; Editing by Subhranshu
Sahu)
  
 
 
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