Baht level linked to signal from Fed, gold trend
The baht opened at 33.32 to the US dollar on Monday, weakening from last week’s closing rate of 33.25.
The Thai currency is likely to move between 33.25 and 33.40 during the day and between 33.00 and 33.50 this week, Krungthai Bank market strategist Poon Panichpibool said.
Poon said the baht was still pressured by the decision of some investors who had sold their assets as they were worried about the Covid-19 situation in Thailand. They had stopped speculating that the baht would strengthen, and had sold a large number of short-term bonds last week.
Also, the baht might fluctuate according to the gold price in light of the Federal Open Market Committee meeting. A fall in gold price might prompt investors to exchange the dollar for the precious metal, which will pressure the baht to weaken.
Meanwhile, he added that the dollar might be sold if the US Federal Reserve does not send a signal to reduce quantitive easing more than the market expected. The dollar might weaken if the Fed expresses concern about economic recovery as the US economy is slowing down.
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The key resistance level for the baht would be from 33.30 to 33.50 to the dollar, which is the level at which exporters might sell the US currency.
The baht’s key support level would be at 33.00, the level some importers are waiting for so they can buy dollars, he added.
