Baht halts skid as currency market goes risk-off
The baht opened at 38.04 to the US dollar on Tuesday, strengthening from Monday’s close of 38.10.
The currency will likely move between 37.90 and 38.15 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.
Poon speculated the baht would swing sideways and not strengthen beyond 38 per dollar since the currency market has returned to a risk-off state.
The baht has emerged as Southeast Asia’s worst-performing currency in the second half of 2022, according to Bloomberg. The Thai currency has dropped 7 per cent in that period and hit a 16-year low against the dollar, which is being buoyed by aggressive US policy rate hikes.
The market is now a risk-off state with investors looking to buy gold as its price drops.
However, the baht’s weakening might be limited by the gradual return of foreign investors to the Thai stock market, Poon said.
He advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
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