Thailand: Risk-off market may make baht fluctuate, even weaken

The baht opened at 36.72 to the US dollar on Monday, strengthening from Friday’s close of 36.74.

The Thai currency will likely move between 36.65 and 36.85 against the greenback during the day and between 36.35 and 36.95 during the week, Krungthai market strategist Poon Panichpibool predicted.

He added that the baht might fluctuate and weaken as the market is in a risk-off state. The baht might also strengthen from a bearish divergence technical sign soon, he said and suggested monitoring foreign investors’ transactions and gold prices.

Meanwhile, the dollar could fluctuate and swing sideways due to demand for safe-haven assets.

He said that if the European Central Bank increases the interest rate and sends a signal to increase it continuously, it might support the euro and pressure the dollar.

The strategist advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

In the previous week, investors were in a risk-off state due to concerns that the US Federal Reserve might increase the interest rate, the lockdown measure in China and the energy crisis in Europe.

He said the market is waiting for the result of the European Central Bank’s meeting this week and a statement from the Fed’s chair or officials, to predict the direction of the monetary policy of central banks.


Published : September 05, 2022