Poon expected the baht would continue to swing sideways under pressure from the strengthening dollar after the US Federal Reserve signalled a tightening of monetary policy, as well as demand for safe assets in the short term.

He advised keeping a close watch for possible short-term foreign outflows from Thai stocks. Thai bonds may also be hit by foreign outflows following the rise in US bond yields, he added.

However, moves to sell gold after the price reached its key resistance level of 1,950 dollars per ounce would support the baht and limit any weakening.

Exporters are selling the dollar in a range between 33.70 and 33.80. Poon said the baht would likely not weaken past that point unless the market goes heavily risk-off.

Amid high volatility in the currency market, businesses should use hedging tools such as options to manage risks, he added.