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Thailand: Baht likely to be volatile, weaken due to Covid-19 situation: market strategist
The baht opened at 33.46 to the US dollar on Wednesday, its lowest in three years and unchanged from Tuesday’s closing rate.
The Thai currency is likely to move between 33.40 and 33.55 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He said the baht was likely to be volatile and weaken due to the Covid-19 situation and the rising momentum of the US currency.
He expected the dollar in the short term to receive support if the US Federal Reserve moves to decrease quantitative easing (QE) quicker than expected. Investors are keenly watching US economic data, including employment and inflation. If the results are worse than expected, investors in turn will not expect the Fed to decrease QE quickly, affecting the weakening or strengthening of the dollar, Poon explained.
He also said the Covid-19 situation worldwide is affecting the dollar and the baht. If the situation in Europe and Asia improves, the dollar might weaken.
Meanwhile, the baht itself might weaken because foreign investors were still offloading their assets, feeling the Covid-19 situation in Thailand could worsen, he said.
The baht was likely to be volatile in the short term due to uncertainty amid the Covid situation, he added, recommending that investors use various hedging tools as options.
Published : August 11, 2021
By : The Nation