The outlook for emerging Asian currencies has brightened compared to the beginning of the year, driven largely by a weaker dollar on fading expectations for major U.S. tax cuts any time soon, a Reuters poll found.

Most Asian currencies have got the better of the dollar which has taken a beating on growing concerns over the U.S. administration's inability to deliver on promises made.

The Chinese yuan, a major focal point for global markets in the past few months as authorities scrambled to stabilise it and flush out speculators betting on a steep fall, looked set to end the year in better shape than previously thought.

The Taiwan dollar was among the best performers in Asia, up nearly 6 percent this year. The Korean won, Malaysian ringgit, Singapore dollar and Thai baht have gained more than 4 percent.

The latest poll consensus of more than 60 foreign exchange strategists surveyed over the past week showed many of the major Asian currencies are likely to hold onto most of their gains made this year over the coming 12 months.

That is in contrast to a poll in January, which predicted a steep fall against the dollar on expectations for fiscal stimulus and a faster pace of Federal Reserve rate hikes.

"There has been some disappointment in lack of progress in the U.S. in terms of pushing through fiscal reforms and tax reforms, which is one of the reasons why the dollar hasn't done that well," said Julian Evans-Pritchard, China economist at Capital Economics.

"We still do expect a small fiscal package at some point probably in the next year but the market has started to question (President Donald) Trump's ability to get as much done and I don't expect any kind of major fiscal stimulus to help the dollar jump higher."

The Chinese yuan and Indian rupee have gained over 2 percent against the dollar this year, with half of those gains made over the last two months.

The yuan is predicted to trade at 6.95 per dollar by the end of this year, compared to 7.2 forecast at the beginning of the year. The Indian rupee is tipped around 65.5 to the dollar by end-2017 compared to 69.5 seen in January poll.

While the outlook has definitely brightened for Asian currencies, it is mainly due to the loss of momentum in the dollar with country-specific factors playing second fiddle.

Bets in the latest poll have turned less bullish for the dollar as much of the Federal Reserve's policy tightening plan has already been priced-in and the real risk now is that the central bank may be pushed off its path.

But a separate Reuters poll on positioning showed speculators trimmed their bullish bets in most of the Asian currencies, even as they increased their long positions in the Indonesian rupiah and the Thai baht. [ASIA/FXP]

The outlook for the regional currencies was also supported by better economic performance and some reforms undertaken in recent months.

China's economy grew a solid 6.9 percent in the first quarter on a year earlier, supported by significant government infrastructure spending.

A string of curbs on capital outflows by Beijing, and the introduction of a different methodology to calculate the mid-point reference rate for the yuan by the People's Bank of China (PBOC) has also helped restore market confidence in the currency.

"We have revised our USD/CNY forecast and the reason is that the dollar has not been stronger than we expected. The other reason is the Chinese economy has stabilized and that should be good for CNY," said Irene Cheung, senior Asia FX strategist at ANZ.

Separately, the strength in the Indian rupee has been driven in part by confidence the government will likely pass through major reforms and on expectations for better economic growth.

The implementation of the goods and services tax (GST) by the government, touted as the biggest tax reform since independence, has bolstered the view on the Indian economy as well as the outlook for its stocks. [EPOLL/IN]

"We are still quite constructive on the INR and the reason is reforms," added ANZ's Cheung.

-Reuters