Poon said the baht could weaken as the dollar strengthens. However, foreign investment has not significantly flowed out of Thailand so the baht will not weaken much but could test the key resistance level of 34.75.

He said the downward direction of the baht might reverse in the short term following market reaction to April’s US inflation report and US Federal Reserve statements. If April inflation slows and the Fed declines to signal a rate rise, the dollar may weaken and the market could return to a risk-on state, causing the baht to strengthen.

Poon advised businesses to use hedging tools such as options to manage risks in the highly volatile currency market.