Yuan sees first bullish bets in four months; rupee long positions cut: poll

Investor sentiment on most emerging Asian currencies improved over the last two weeks, with the first bullish bets seen on China's yuan in four months as the currency showed signs of stabilising, a Reuters poll showed on Thursday.

Long positions on the rupee, however, fell to the lowest level since late April, as higher oil prices on intensifying turmoil in Iraq are seen hurting India's economy and further straining government finances.

Sentiment on the yuan turned bullish after persistent pessimism since mid-February, according to the Reuters survey of 11 currency analysts.

That view was likely fueled by a change of tack by the central bank, which set a series of stronger midpoints last week which helped the yuan to its best weekly gain since December 2011.

The People's Bank of China (PBOC) had surprised markets by guiding the yuan sharply lower earlier in the year in an apparent bid to deter speculators betting on non-stop appreciation.

Still, traders are unsure whether the PBOC will now keep the yuan confined to its recent ranges in coming weeks or if it is ready to allow it to return to its gradual appreciation path.

Views on most emerging Asian currencies improved as the U.S. Federal Reserve signalled it was committed to keeping monetary policy accommodative for some time, reviving expectations of more capital inflows to the region in search of higher yields.

Short positions in the Thai baht fell to the lowest level since late April, before the May 22 military coup, on hopes that the junta's plans to kick-start the ailing economy will soon start to bear fruit.

By contrast, rising oil prices hurt sentiment on the rupee, as India imports nearly two-thirds of its oil needs.

Oil prices hovered near nine-month highs as fighting in Iraq raised concerns of potential supply disruption in the second-largest producer of Organization of the Petroleum Exporting Countries.

Long positions in the South Korean won eased slightly on increasing caution over possible intervention by the foreign exchange authorities 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.