Short rupee positions at four-month low on new RBI chief; long yuan, won bets higher: Reuters poll

By Jongwoo Cheon

SINGAPORE (Reuters) - Short positions in the Indian rupee fell to a four-month low as sentiment toward emerging Asian currencies improved on growing doubts the Federal Reserve will scale back its stimulus as aggressively as first feared, a Reuters poll showed on Thursday.

Bearish bets on the rupee slid to the lowest level since early May, according to a Reuters survey of 14 currency analysts conducted between Wednesday and Thursday.

The Fed is now expected to trim its monthly bond purchases by $10 billion - less than previously forecast - according to a Reuters poll on Monday. Economists still thought it would announce the step this month.

The change in expectations followed disappointing August U.S. unemployment data last week, which showed employers hired fewer workers than expected.

But that brought relief for riskier assets such as emerging market currencies, especially the rupee, which has been hammered since May.

The Indian currency earlier on Thursday hit its strongest in more than three weeks amid expectations the new RBI governor, Raghuram Rajan, will be able to stabilise the ailing currency. It was also supported by a narrowing trade deficit.

In late August, the rupee hit successive record lows on mounting worries about the country's current account deficit, coupled with large outflows of foreign money due to rising bond yields in the United States.

Optimism on the South Korean won reached the highest since mid-January thanks to sustained equity inflows to Asia's fourth-largest economy. The South Korean currency touched its strongest in more than six months.

Long positions in the Chinese yuan hit the largest level since early June on more signs of stabilsation in the world's second-largest economy.

Capital inflows to Taiwan helped spark the first bullish bets in four months in the island's currency. Long positions in the Taiwan dollar were the largest since early January.

Sentiment on the Singapore dollar also turned bullish for the first time since early May, while the Philippine peso enjoyed the first bullish positions since early June.

Respondents remained the most bearish on the Indonesian rupiah, though such bets fell to a similar level seen on August 1 on some capital inflows.

Bearish bets on the Malaysian ringgit and the Thai baht fell to less than 20 percent of levels seen in the previous poll.

The prior survey showed short positions in the rupee and some Southeast Asian currencies hit the largest levels since the global financial crisis in 2008.

The Reuters survey is focused on what analysts believe are the current market positions in nine Asian emerging market currencies: 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 Sumanta Dey in Banalore; Editing by Kim Coghill)