Bareksa.com - Investor sentiment on most emerging Asian currencies improved in the last two weeks with long positions in the Chinese yuan at their largest in nearly five months, a Reuters poll showed, with monetary policy in developed countries staying accommodative.

The Indonesian rupiah, however, suffered the highest bearish bets in five months, on uncertainty over the presidential election next week and renewed concerns over the country's current account deficit.

The yuan's long positions rose to their largest since mid-February, according to the poll of 14 analysts conducted between Tuesday and Thursday.

The renminbi rose 0.7 percent in June, the largest monthly gain since April last year, as optimism over its potential appreciation is returning to the market after a sharp decline in the currency earlier this year.

China's economy was seen stabilising from a series of government policy measures, which also underpinned the firmer outlook on the Chinese currency.

Long positions in the South Korean won increased to their largest since January 2013 as sustained capital inflows and a continuous current account surplus lifted the currency to a six-year high.

That helped the Taiwan dollar see the most bullish positions since early May.

Taiwan's central bank may allow its currency to appreciate further as it is the second-worst performing currency so far this year after the yuan.

The monetary authority closely watches the won's movements in managing currency policy as some companies such as Taiwan Semiconductor Manufacturing Co Ltd compete with South Korean rivals in overseas markets.

Bullish bets on the Philippine peso and the Malaysian ringgit rose as their central banks are expected to tighten policy as early as this month.

Optimism on most emerging Asian currencies increased as the U.S. Federal Reserve may not be in a hurry to raise interest rates after recent softer economic indicators.

A separate poll of foreign exchange strategists found Asian currencies will probably hold their ground until the end of the year and then weaken in early 2015 when a long-awaited U.S. dollar rally is expected to kick in.

Still, some regional currencies failed to ride on the overall appreciation outlook.

Short positions in the rupiah reached the largest level since late January, as investors prepared for the volatility and weakness that could ensue should the presidential election be won by an ex-general Prabowo Subianto.

Indonesia's ruling Democratic Party said it was backing presidential hopeful Prabowo ahead of the election, according to media.

In March, the rupiah was emerging Asia's strongest currency in 2014, gaining 8 percent on hopes for a victory for Joko "Jokowi" Widodo, who had a reputation for good governance fom his work as governor of Jakarta.

Indonesia reported a much smaller-than-expected trade surplus in May, reviving concerns over the country's current account deficit.

Sentiment on the Indian rupee became slightly less bullish as the central bank continued to intervene to stem the currency's appreciation.

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).

The survey findings are provided below (positions in U.S. dollar versus each currency):

DATE CNY KRW SGD IDR TWD INR MYR PHP THB
3-July -0.69 -1.53 -0.47 0.64 -0.57 -0.14 -0.92 -0.69 0.28
19-June -0.18 -1.10 -0.18 0.45 -0.41 -0.34 -0.73 -0.24 0.15
5-June 0.29 -1.21 -0.06 0.51 -0.29 -1.01 -0.65 -0.69 0.73
22-May 0.53 -1.24 -0.32 -0.60 -0.28 -1.47 -0.94 -0.88 0.54
8-May 0.31 -1.50 -0.74 -0.40 -0.60 -0.90 -0.65 -0.46 0.17
24-Apr 0.73 -0.88 0.08 -0.33 -0.02 -0.32 -0.17 0.07 0.13
10-Apr 0.69 -1.12 -0.68 -1.00 -0.34 -1.14 -0.64 0.07 0.10
27-Mar 0.80 0.27 0.07 -0.72 0.55 -1.06 -0.22 0.13 0.35
13-Mar 0.41 -0.01 0.23 -1.28 0.35 -1.22 -0.43 -0.18 0.07
27-Feb 0.00 -0.09 -0.07 -0.87 0.52 -0.40 -0.31 0.14 0.59

(Source : Reuters)