The currency is expected to move between 36.60 and 36.90 during the day, Krungthai Bank market strategist Poon Panichpibool predicted.

Poon said the baht is highly volatile and may weaken to test its resistance level at 36.85 or even 36.95 if the greenback continues to strengthen on the back of expectations that the US Federal Reserve will increase the interest rate and spike demand for safe assets.

The baht is also pressured by large currency transactions, such as the energy sector buying the dollar after the price of crude oil dropped or multinational corporations buying the Japanese yen after it weakened to 140 yen to the dollar.

The falling price of gold is also pressuring the baht, he said. He expects some investors to buy gold at its support level of $1,700 per ounce to sell at $1,750 to $1,770 per ounce.

He also suggested that monitoring foreign investors’ transactions would help indicate the baht’s trend, especially if they sell more Thai stocks and bonds.

Poon believes the Thai stock market correction and bond yield will rise, allowing foreign investors to buy more Thai assets, especially when the baht weakens to test its key resistance level.

The strategist advises investors to use hedging tools such as options to manage risks in a highly volatile currency market.