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Thailand: Weakening baht sliding towards 32 to the dollar
The baht opened at 31.82 to the US dollar on Monday, weakening from Friday’s closing rate of 31.78.
The Thai currency is likely to move between 31.75 and 31.90 during the day and between 31.60 and 32.10 within this week, Krungthai Bank market strategist Poon Panichpibool said.
He said that the baht tended to weaken due to several factors – such as the dollar’s direction, and the funds flow of foreign investors in Thailand.
Poon predicted that the dollar would strengthen, if the US economy recovered more than observers expected, and Fed officials showed support for stricter fiscal measures.
Also, he added that the Covid-19 situation in Europe and Asia was another factor to support the dollar.
Regarding foreign investment, Poon said that the worsening Covid-19 crisis in Thailand had prompted foreign investors to sell their stocks, pressuring the baht to weaken. The market strategist said that the government must provide at least 500,000 jabs a day in order to make investors more confident in Thailand.
In addition, Poon said that JP Morgan had already changed the proportion of bonds in its Government Bond Index – Emerging Markets. “It was possible that foreign investors would sell their Thai bonds – worth around THB10 billion in total – in order to change their bond proportion,” he explained, adding that last week investors had sold THB4.3 billion worth of Thai bonds.
The important resistance for the baht is at 32 to the US dollar, Poon said.
Published : June 28, 2021
By : The Nation