Asia FX sentiment improves as Fed rate hike views ease, rupee bets near 5-mth high: Reuters Poll

By Jongwoo Cheon

SINGAPORE (Reuters) - Sentiment towards emerging Asian currencies improved in the past two weeks with long positions in the Indian rupee near a five-month high, a Reuters poll showed, amid views that the U.S. Federal Reserve will hold off on interest rate hikes for a longer time.

Bullish bets on the rupee grew to the largest since early June, according to the survey of 15 currency analysts, as capital inflows were spurred by hopes the new government would be able to push through more economic reforms.

Long positions in the Chinese yuan increased as the currency hit a seven-month high on Wednesday after data showing the world's second-largest economy did not slow as much as feared in the third quarter.

View on the South Korean won, the Singapore dollar, the Philippine peso and the Thai baht turned bullish for the first time in about two months.

Short positions in Indonesia's rupiah fell to the lowest since late August when sentiment on the currency was neutral.

The rupiah on Tuesday rose to a near four-week high as reform-minded President Joko Widodo took office on Monday.

Optimism on regional currencies came as the Fed's September policy meeting minutes indicated the U.S. central bank was in no hurry to increase interest rates amid slowing global growth.

Sentiment towards emerging Asian currencies was bearish, recent Reuters polls showed, as solid U.S. economic data raised expectations that the Fed may raise borrowing costs faster than the market had earlier anticipated.

Rising U.S. interest rates usually dampen attractiveness of higher yields in Asia.

The Reuters survey is focused on what analysts 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 included positions held through non-deliverable forwards (NDFs).

(Additional reporting by Masayuki Kitano; Editing by Kim Coghill)