By Roushni Nair
(Reuters) -Bearish bets on China’s yuan hit their highest since mid-May, with analysts turning short for the first time amid mounting concerns over the economy, a Reuters poll showed on Thursday.
China’s economy lost steam in July, with retail sales rising just 3.7% year-on-year, well below the 5.9% growth expected in a Reuters poll.
Industrial output grew 5.7%, its weakest pace since November 2024.
New home prices fell 2.8% in July from a year earlier, extending a two-year stagnation, while fixed-asset investment rose just 1.6% in the first seven months of 2025, missing forecasts for 2.7%.
Meanwhile, analysts held on to their bearish outlook for the South Korean won, unchanged since early May, while slightly trimming short positions on the Singapore dollar, a Reuters fortnightly poll of 11 respondents showed.
Sentiment toward the Indonesian rupiah turned negative after flipping bullish, while short positions on the Taiwan dollar were trimmed.
Bank Indonesia unexpectedly cut its benchmark 7-day reverse repurchase rate by 25 basis points on Wednesday. The poll responses were received before the rate decision.
For the Indian rupee and Malaysian ringgit analysts pared back bullish positions. Philippine peso bearish bets were trimmed slightly, and Thai baht analysts trimmed bullish positions.
ANZ analysts see India’s growth momentum slowing with tepid household consumption and investment expected over the coming quarters, adding that export competitiveness faces headwinds from US tariffs. “Based on this outlook, we believe that the INR is likely to trade with a depreciation bias in the near-to-medium term, underperforming compared to its Asian peers.”
Meanwhile, Reuters reported China is considering allowing yuan-backed stablecoins for the first time to boost wider adoption globally.
China is expected to discuss expanding yuan use and possibly stablecoins for cross-border trade at the Shanghai Cooperation Organisation Summit to be held Aug. 31-Sep. 1 in Tianjin.
“Given potential Federal Reserve reluctance to deliver significant rate cuts at upcoming FOMC meetings (contingent on employment and inflation data), market repricing of rate cut expectations could drive the U.S. Dollar and Treasury yields higher, creating headwinds for emerging market currencies,” said Poon Panichpibool, market strategist at Krung Thai Bank.
Money markets reflect a 93% chance of a 25-basis-point Fed rate cut in September. The U.S dollar index has lost 0.8% in value in the last two weeks, but is on track to edge higher this week, up 0.4% so far. [USD/]
“We have had quite a strong sell-off in the USD for much of 1H 2025 and currencies now await macro cues from data. With both of Fed’s inflation and employment mandate in a potential conflict, we could be in a period of consolidation,” said Fiona Lim, senior forex strategist at Maybank Singapore.
“Currencies such as KRW and TWD which gained the most in 1H of 2025 have the biggest room to retrace.”
Investors fretted about Federal Reserve independence after another attack from President Donald Trump ahead of remarks from Chair Jerome Powell at the annual Jackson Hole symposium later this week.
The Asian currency positioning poll is focused on what analysts and fund managers 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 include positions held through non-deliverable forwards (NDFs).
The survey findings are provided below (positions in U.S. dollar versus each currency):
DATE USD/CNY USD/KRW USD/SGD USD/IDR USD/TWD USD/INR USD/MYR USD/PHP USD/THB
21-Aug-25 0.06 0.35 -0.73 -0.08 -0.35 0.94 -0.40 0.22 -0.31
7-Aug-25 -0.09 0.35 -0.87 0.35 -0.50 1.33 -0.58 0.35 -0.40
24-Jul-25 -0.57 -0.10 -1.09 -0.05 -1.06 0.51 -0.57 0.21 -0.14
10-Jul-25 -0.54 -0.63 -1.30 -0.38 -1.65 0.36 -0.48 -0.06 -0.11
26-Jun-25 -0.74 -1.06 -1.22 -0.20 -1.48 0.89 -0.76 0.21 -0.33
12-Jun-25 -0.78 -1.37 -1.24 -0.60 -1.58 0.03 -1.25 -0.93 -1.24
29-May-25 -0.67 -1.20 -1.34 -0.32 -1.50 -0.08 -1.04 -1.19 -1.14
15-May-25 0.00 -0.22 -0.54 0.70 -1.01 -0.19 -0.15 -0.68 -0.45
01-May-25 0.20 -0.06 -0.67 1.27 -0.53 -0.58 -0.40 -1.02 -0.61
17-Apr-25 0.57 0.19 -0.26 1.33 0.06 -0.20 0.04 -0.65 -0.30
(Reporting by Roushni Nair in Bengaluru; Editing by Nivedita Bhattacharjee)
