Poon expected the baht to fluctuate in a wide range and test a new resistance level at 33.90 to the dollar, citing the impact on Thai exports and tourism of the Covid-19 situation in China.

He added that the baht would also face downward pressure from speculators seeking to purchase the low-lying Yen as Japanese companies approach the end of the fiscal year (March 31).

Poon said the baht’s slide would be limited if foreign investors decide against selling off Thai assets. Foreigner inflows recently returned to the Thai stock market, though sales of short-term bonds are slowing. However, foreign investors are now selling long-term bonds in Emerging Asia including Thailand, to ease the pressure of rising bond yields.

Poon expects the US 10-year bonds to hit their highest yields this year in May amid the expected interest rate hike by the US Federal Reserve. This should spur foreign inflows to Thai long-term bonds, he added.

The market is open to more risk but asset prices were fluctuating heavily, the analyst said. The supporting factor for the currency market was hope coming from the Ukraine-Russia negotiations, after Ukraine signalled it may adopt a neutral status.

However, China’s Covid-19 situation was pressuring the currency market after the officials announced the lockdown of Shanghai. This would affect economic recovery in China and globally while also driving down the price of crude oil from $114 to $108 per barrel.