Thailand
Thailand: Baht likely to face continued downward pressure due to Covid situation
The baht opened at 33.10 to the US dollar on Friday, strengthening from Wednesday’s closing rate of 33.35.
The Thai currency is likely to move between 33.05 and 33.20 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He said the baht was likely to be volatile and weaken due to the Covid-19 situation and the rising momentum of the US currency.
He expected the dollar to receive support in the short term if the US Federal Reserve moves to decrease quantitative easing earlier than expected until late August, as there will be the Jackson Hole Economic Symposium at that time.
The US economy’s data that needed to be watched are initial jobless claims or employment index and the Purchasing Managers Index. If the results are worse than expected, investors in turn will not expect the Fed to lower QE quickly, affecting the dollar, Poon explained.
He said the Covid-19 situation worldwide is affecting the dollar and the baht. If the situation in Europe and Asia improves, the dollar might weaken.
Meanwhile, the baht itself might weaken because foreign investors were still offloading their assets, due to worries that the Covid-19 situation in Thailand could worsen, he said.
He believed that importers were buying the dollar because the baht was strengthening. Because of this, the baht will not strengthen much and the key support level will be at around 33.00 to the dollar.
The baht was likely to be volatile in the short term due to uncertainty amid the Covid situation, he added, recommending that investors use various hedging tools as options.
Published : August 13, 2021
By : The Nation