Long positions in yuan near 7-month high; rupee sentiment turns bearish: poll

Sentiment on most emerging Asian currencies slightly weakened

Long positions in the Chinese yuan hit a near seven-month high and rose in the South Korean won, but sentiment on most emerging Asian currencies slightly deteriorated in the last two weeks, a Reuters poll showed on Thursday.

Bullish bets on the won climbed even as the market widely anticipated a rate cut by the Bank of Korea to shore up the economy, according to the survey of 15 analysts conducted between Tuesday and Thursday.

After the central bank announced its decision to cut rates on Thursday, the won rose to a one-month high as the Bank of Korea governor provided few hints of further easing.

Sentiment on the yuan turned the most optimistic since late January, as investors piled up long positions on the currency amid signs of stabilisation in the Chinese economy.

On Monday, the renminbi touched a near five-month peak, as China's central bank signalled it was comfortable with the stronger currency.

The Malaysian ringgit's long positions rose as foreign investors bought local bonds. Investors also purchased the currency against the neighbouring Singapore dollar to seek higher yields.

Bullish bets on the Thai baht extended to their largest since April 2013 on capital inflows.

Sentiment on most emerging Asian currencies, however, slightly weakened on geopolitical tensions in Ukraine.

Investors went short on the rupee for the first time since late January as higher-than-expected consumer inflation and below-forecast June industrial output hit sentiment.

Long positions in the Indonesian rupiah xalmost disappeared as the country's current account deficit in the second quarter was larger than expected.

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 US dollars. The figures included positions held through non-deliverable forwards (NDFs).