Poon said the baht might fluctuate and weaken during the day, especially before and after a key Monetary Policy Committee (MPC) meeting. If the MPC does not provide any signal that it would gradually increase the interest rate even if inflation rises, investors might still feel it will increase the rate eventually and this may force them to offload their bonds, Poon said.

However, whether the baht strengthens or weakens, it may not be by too much especially if the MPC thinks the economy might be improving and the tourism sector recovering better than expected.

Poon said the baht’s resistance level is 34.50 to 34.60 to the dollar – the level at which exporters are waiting to sell the US currency.

He added that the baht might not weaken heavily if investors do not view EM Asia assets as risky.

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