Krungthai said that the baht is likely to weaken if the market enters a risk-off state due to a worsening in the Ukraine-Russia situation.

However, any weakening of the baht would be limited because it is supported by gold selling. 

Meanwhile, foreign investors expect the baht to strengthen on the back of Thailand’s economic and tourism recovery, with some international financial institutions predicting it will rise to 30.50-31/dollar by the end of the year.

Krungthai explained that orders from importers and exporters coupled with poor liquidity were causing the baht to fluctuate and swing sideways in a wider range.

It said that the key support level is 32/dollar, at which point importers would buy dollars and foreign investors would sell. The bank expects exporters to sell the dollar when the baht reaches the key resistance level of between 32.80 and 32.90.

It added that the dollar was supported by uncertainty over the Ukraine-Russia crisis, which was causing investors to hold on to US currency. Meanwhile the dollar would gain more support if the US Federal Reserve raises the interest rate again this year.