Baht strengthens on back of weaker dollar
The baht opened at 33.46 to the US dollar on Tuesday, strengthening from Monday’s closing rate of 33.48.
The Thai currency is likely to move between 33.30 and 33.50 during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon said that the baht would fluctuate in the short term. The market was in a risk-on state caused the dollar to weaken while the baht strengthens. The baht is also strengthening because foreign investors are investing in Thai stocks especially stocks relating to country opening.
However, the gold price pressured the baht to weaken. Some gold investors bought gold after the price went down near the key support level. The baht was also pressured by domestic risk factors such as floods and the Covid-19 situation.
The key resistance level for the baht would be from 33.50 to 33.60 to the dollar, which is the level at which exporters might sell the US currency.
The baht’s key support level would be from 33.10 to 33.20, the level some importers are waiting for so they can buy dollars, he added.
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Poon said that it will be hard for baht to strengthen heavily in the short term such as the 32.50 to the dollar level because the basic factors are not fully recovered.
Poon said that the baht is highly volatile and could suddenly change direction. He recommended that investors use various hedging tools such as options or Foreign Currency Deposit (FCD) accounts with a currency forward.
