Rapid strengthening of baht might slow: market strategist
The baht opened at 36.87 to the US dollar on Thursday, weakening from Wednesday’s close of 36.85.
The currency will likely move between 36.75 and 37.05 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.
He said the rapid strengthening of the baht might slow down and the currency could weaken after investors returned to a cautious state as they await the results of a US midterm election and consumer price index (CPI) inflation data.
Poon estimated that if the CPI, especially core inflation, rises by more than 0.5 per cent from the previous month, it may lead to market concern that the US Federal Reserve might increase the interest rate and provide support for the dollar to strengthen.
However, if the baht weakens, it might not be severe as some exporters are now waiting to sell the dollar at 37.30 baht, he believed. They had previously targeted a level of 38 or higher.
Furthermore, international transactions are still flowing into the Thai stock market. Poon expects foreign investors to sell their shares for profit in the short term, when the Stock Exchange of Thailand Index almost touches its resistance level of 1,650 points.
He advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
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