Asia FX sentiment less bearish amid hopes of Greek deal

Singapore

SENTIMENT towards most emerging Asian currencies became less bearish in the last two weeks with the view on Thailand's baht and Malaysia's ringgit at its best in four months, a Reuters poll showed on Wednesday, amid hopes of a new Greek debt deal.

Pessimism on the Indonesian rupiah, however, rose as the central bank unexpectedly cut interest rates on Tuesday.

The outlook on the baht turned positive with long positions in the Thai currency at the highest since late October, according to a survey of 15 currency analysts and traders conducted between Monday and Wednesday.

The baht was the third best-performing emerging Asian currency so far this year with a 1.1 per cent gain against the dollar, according to Thomson Reuters data. Stock inflows have been supporting the Thai currency.

Short positions in the ringgit shrank to the smallest since late October.

The Malaysian currency found relief as a rebound in oil prices alleviated concerns that sliding crude may hurt the country's current account surplus and widen its fiscal deficit.

1Malaysia Development Bhd has settled in full a RM2 billion (S$750 million) loan it owed local banks, also easing worries about its debt payments.

Bearish bets on the Chinese yuan fell from a near 10-month high in the previous poll published on Feb 5. Short positions in the Singapore dollar also slid with both fourth-quarter growth and January exports stronger than expected.

Pessimism on regional currencies largely remained amid uncertainties about debt discussions between Greece and eurozone partners that will help the debt-ridden country avoid a messy exit from the currency union.

Investors were also awaiting minutes of the latest US Federal Reserve's policy meeting for clues on the timing of a rate hike.

Long positions in the Indian rupee and the Philippine peso fell. The South Korean won's short positions increased as the central bank chief on Tuesday made cautious remarks on the economic outlook.

The won was already under pressure as the yen last week weakened past 120 per dollar. Reuters