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Thailand: Baht performance hinges on Covid situation, Fed’s QE decision

  • Aug 23, 2021

The baht opened at 33.30 to the US dollar on Monday, strengthening from last week’s closing rate of 33.36.

The Thai currency is likely to move between 33.25 and 33.40 during the day and between 33.00 and 33.50 this week, Krungthai Bank market strategist Poon Panichpibool said.

Poon predicted the baht would move sideways as investors were waiting for important factors such as the US Federal Reserve’s move to reduce quantitative easing (QE).

Moreover, the Covid-19 situation could affect the baht, he pointed out.

Investors believed that the Bank of Thailand might decrease the policy interest rate by 0.25 per cent in their August meeting, causing the baht to weaken, Poon said.

Meanwhile, short-term demand for safe-haven assets is supporting the dollar’s momentum, he said.

The US currency is likely to fluctuate and weaken if the Fed does not signal that it will decrease its QE or voices concern about the Covid-19 situation.

Poon expected the key resistance level for the baht would be between 33.40 and 33.50 to the US dollar.

He added that the key support level would be around 33.00-33.10 to the dollar, the price range importers are waiting for to exchange their dollars.

 

Published : August 23, 2021

By : The Nation