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Thailand: Baht gains amid change in perception on Covid situation
The baht opened at 32.88 to the US dollar on Wednesday, strengthening from Tuesday’s closing rate of 32.92, the strongest in almost a month.
The Thai currency is likely to move between 32.80 and 33.00 during the day, Krungthai Bank market strategist Poon Panichpibool said.
Poon explained that investors had changed their views on the Covid-19 situation, which had led to the weakening of the dollar.
The baht may strengthen in the short term on hopes that the situation in Thailand was likely past its worst point, attracting foreign investors to invest in Thai stocks.
The Thai currency might slow down close to its support level of 32.80 to the US currency, the price range importers are waiting for to buy dollars, he said.
The baht will stay around this level as investors are buying up the US currency as the month draws to a close.
However, Poon believed the baht was likely to fluctuate and weaken as the situation was not clearly better. The baht has also been affected by the strengthening dollar.
If the situation worldwide does not improve along with the US Federal Reserve’s move to reduce quantitative easing (QE), stock prices might be affected, Poon noted.
Foreign investors will temporarily decrease investments in Asian emerging markets as they might be worried about the effects of a reduction in QE, much like the QE “taper tantrum” in 2013, he added.
Published : August 25, 2021
By : The Nation