Baht weakens as investors offload stocks, short term bonds
The baht opened at 33.74 to the US dollar on Thursday, weakening from Wednesday’s closing rate of 33.72.
The Thai currency is likely to move between 33.60 and 33.80 to the greenback during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon said that the baht is weakening as investors sell Thai stocks or short term bonds. Poon said that the baht will be pressured during the day from the worry of the Omicron variant.
Moreover, the technical signs revealed that the baht is still pressured by weakening factors which cause foreign investors to not invest back in the baht. However, Poon said that the gold price rebound and exporters selling the dollar support the baht to not weaken much more.
According to the technical sign, Poon believed that the baht might strengthen in the next two or three weeks if the scientific research revealed that the vaccine distribution could prevent the spread of the Omicron variant which the economic recovery will not affect much.
The key resistance level for the baht would be from 33.80 to 34 to the dollar, which is the level at which exporters might sell the US currency.
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The baht’s key support level would be at 33.40, the level some importers are waiting for so they can buy dollars, he added.
Poon said that the currency market will be highly volatile in this period. Business operators should be cautious and use hedging tools to manage the risk.
