Investors raised their long positions on most Asian currencies to the highest level since late January, a Reuters poll showed, as easing coronavirus-induced lockdowns and massive stimulus fuelled hopes for a swift economic recovery.
The last time long bets in Asian currencies scaled these levels was when the United States and China signed the first phase of an agreement to defuse their 18-month-long trade war, just before panic over the COVID-19 outbreak gripped markets.
Investors cut short positions in China’s yuan to the lowest level since late April, a fortnightly poll of 16 respondents showed.
Easing social gathering restrictions and unprecedented stimulus by central banks have fuelled a new wave of economic recovery optimism, largely reducing the greenback’s appeal and supporting Asian currencies.
Market participants turned bullish on South Korea’s won and Singapore’s dollar for the first time since late January.
Both the trade-reliant economies have rolled out large stimulus packages recently to soften the blow from the pandemic.