Bullish bets on PH peso rise to highest in 2 years

Posted at 12/06/2012 5:58 PM | Updated as of 12/07/2012 9:28 AM

BANGALORE - Bullish bets on the Philippine peso rose to the highest in more than two years during the past two weeks, while investors almost doubled long positions on the Malaysian ringgit, a Reuters poll showed on Thursday.

Currency market players remained optimistic about the outlook for most emerging Asian units after recent data stirred hopes for a revival in the Chinese economy, and also on hopes that U.S. lawmakers will reach a deal to avoid the "fiscal cliff" of tax hikes and spending cuts due to take effect from the beginning of next year.

In a sign of such optimism, investors increased their long positions in the peso to the highest level since October 2010. The peso is the best performing emerging Asian currency so far in 2012, having appreciated around 7 percent against the U.S. dollar.

The poll also showed long positions on the Malaysian ringgit almost doubled to reach the highest level since mid-September.

Long positions in the South Korean won were trimmed back after hitting a two-year high in the previous survey conducted two weeks ago, and fell to their lowest level since mid-October.

Caution over the won has grown since South Korean authorities dumped up to $1 billion of the currency on Nov 22 in a bid to slow its rally, which is adding to problems for the country's struggling exporters.

Investors also reduced their long positions in the Chinese yuan and Thai baht.

Sentiment toward the Indian rupee improved over the past two weeks and net short positions on the unit fell by over two-thirds.

India's government was able to secure a much-needed majority in Parliament late on Wednesday over a bill to increase foreign investment in the supermarket sector.

The Reuters survey 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 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).