Baht weakens as investors wait for new US Fed chief to be named this week
The baht opened at 32.81 to the US dollar on Monday, weakening from the previous closing of 32.76.
The Thai currency is likely to move between 32.55 and 33.00 to the greenback during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon said that the baht is likely to fluctuate while the dollar might strengthen if the market worries about the inflation and Covid-19 situation in Europe. The dollar might go down if Lael Brainard is picked as a new US Federal Reserve’s chairman which the market expects the Fed will not use tight monetary policy soon.
Moreover, the gold price that fell down might cause investors to buy on dips and pressure the baht to weaken. However, the baht will not strengthen much because foreign investors are waiting to buy Thai stocks and short-term bonds.
The key resistance level for the baht would be at 33 to the dollar, which is the level at which exporters might sell the US currency.
The baht’s key support level would be from 32.55 to 32.60, the level some importers are waiting for so they can buy dollars, he added.
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The dollar strengthen in the last week because the market was worried about the new Covid-19 wave in Europe.
In the next week, the market is waiting for the next Fed chairman who will decide the monetary policy. The market will also keep an eye on world economic data especially the Purchasing Managers' Index.
