Poon said the factors that would cause the baht to weaken are decreasing because the market is open to more risks. Meanwhile, the Covid-19 situation in China might pressure Asian currencies and keep foreigners from investing in the EM Asia stock market in the short term.

Poon expected the baht to swing sideways near the 34 range. Therefore, he suggested keeping a close watch on foreign investors to see whether they would purchase Thai stocks and bonds now that the currency market is opening to more risks.

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

The market opened to more risks after the US Federal Reserve did not signal that it would use tight monetary policies as expected. The Fed agreed to increase the policy interest rate by 0.5 per cent as expected and planned to reduce the balance sheet by $47.5 billion (THB1.62 trillion) per month from June before increasing the figure to $95 billion in September.

Chairman Jerome Powell said the Fed might increase the interest rate by around 0.5 per cent at their next meeting to control inflation.