Asian currencies to face more pressure: Poll

This article is more than 12 months old

May 24, 2019 06:00 am

Investors bet most Asian currencies will come under further pressure, a Reuters poll showed, with trade tensions between the US and China firmly dominating headlines once again.

With diminishing hopes of a long-awaited trade deal between the world's top two economies, the mood across markets has been apprehensive with investors shifting money to safer bets.

Investors, who were bullish on China's yuan for much of this year until the end of April, have since raised their short positions to their highest in six months, the poll of 12 respondents showed.

Escalating tensions have taken a toll on the Chinese economy, but measures promised by Beijing, including massive stimulus, have started to filter through. However, with tensions on the rise yet again, the yuan has lost about 2.5 per cent since US President Donald Trump said on May 5 that he was going to raise tariffs on US$200 billion (S$276 billion) of Chinese imports.

Trade-reliant economies, such as Taiwan and South Korea, are among the most exposed countries to a deterioration in the US-China trade relations.

The poll showed market participants raised their short positions on both country's currencies over the last two weeks with bets on South Korea's won at their highest in more than a decade, with a slew of weak domestic data adding to the unit's woes.- REUTERS