Asian FX bulls gain momentum as dollar stays under pressure

(Reuters) – Buyers ramped up their bullish bets on most Asian currencies, a Reuters ballot confirmed on Thursday, as worries about U.S. commerce insurance policies beneath President Donald Trump continued to weaken the greenback.

Analysts elevated their lengthy positions on the Singapore greenback, the Indian rupee, the Thai baht, and the Philippine peso, in line with a fortnightly ballot of 10 respondents.

Additionally they turned bullish on the South Korean gained, the Taiwan greenback and the Malaysian ringgit for the primary time since October.

The greenback notched its weakest month-to-month efficiency in 2-1/2 years in April, as tariff tensions ignited fears of a worldwide financial slowdown and dented confidence in U.S. property.

Nevertheless, the buck has steadied not too long ago as indicators of progress in broader commerce negotiations, together with with China, which faces the best levies.

“With threat sentiment stabilizing on tentative indicators of a U.S.-China de-escalation and the bond-vigilant U.S. administration serving to to curtail a UST sell-off, Asian currencies could possibly be considerably supported tactically,” Parisha Saimbi, an EM Asia FXLM strategist at BNP Paribas, mentioned.

Lengthy bets on the Philippines peso, which gained 2.6% in April, reached their highest since mid-September, with analysts at Barclays suggesting that the market narrative across the nation being doubtless more-insulated from tariff threats stays intact.

The Philippines has not been spared from the worldwide commerce warfare triggered by Trump’s tariffs, however it faces a relatively modest 17% levies in comparison with different Southeast Asian economies.

Analysts additionally trimmed their quick positions on the Chinese language yuan and the Indonesian rupiah however bets on the latter nonetheless remained firmly within the bearish territory.

The rupiah has been on a downtrend since March on issues over fiscal well being and authorities insurance policies.

The forex’s sharp drop to a document low in early-April had prompted Financial institution Indonesia (BI) to intervene within the offshore non-deliverable ahead market to help the forex, and the financial institution additionally held coverage charges regular final week aiming to keep up rupiah stability.

BNP Paribas’ Saimbi mentioned that the rupiah has scope to meet up with regional friends.

Valuations are engaging to show tactically lengthy on the rupiah now, Saimbi mentioned, including that she sees scope for some portfolio inflows if threat sentiment stabilizes.

The Asian forex positioning ballot is concentrated on what analysts and fund managers imagine are the present market positions in 9 Asian rising market currencies: the Chinese language yuan, South Korean gained, Singapore greenback, Indonesian rupiah, Taiwan greenback, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht.

The ballot makes use of estimates of internet lengthy or quick positions on a scale of minus 3 to plus 3. A rating of plus 3 signifies the market is considerably lengthy U.S. {dollars}.

The figures embody positions held by means of non-deliverable forwards (NDFs).

The survey findings are offered under (positions in U.S. greenback versus every forex):

DATE USD/CNY USD/KRW USD/SGD USD/IDR USD/TWD USD/INR USD/MYR USD/PHP USD/THB

01-Might-25 0.20 -0.06 -0.67 1.27 -0.53 -0.58 -0.40 -1.02 -0.61

17-Apr-25 0.57 0.19 -0.26 1.33 0.06 -0.20 0.04 -0.65 -0.30

03-Apr-25 0.47 1.13 0.54 1.20 1.14 0.01 0.33 -0.15 0.40

20-Mar-25 0.24 0.72 0.15 0.97 0.85 1.09 0.42 -0.13 0.08

06-Mar-25 0.77 1.00 0.34 1.36 0.71 1.47 0.45 0.20 0.48

20-Feb-25 0.88 0.83 0.31 1.06 0.59 1.22 0.37 0.31 0.02

06-Feb-25 1.15 1.01 0.86 1.25 1.14 1.98 0.62 0.93 0.23

23-Jan-25 1.33 1.04 1.11 1.50 1.01 1.78 1.01 0.77 0.54

09-Jan-25 1.65 1.75 1.34 1.20 1.18 1.69 0.99 0.65 0.76