Baht steady against dollar but expert warns of year-end volatility
The baht opened at 34.76 to the US dollar on Monday, weakening slightly from Friday’s close of 34.73.
The currency will likely move between 34.65 and 34.85 against the greenback during the day and between 34.50 and 35.20 during the week, Krungthai market strategist Poon Panichpibool said.
Poon said that the baht could swing sideways and weaken in the short term due to the strengthening dollar and sales of risky assets.
However, he doubts the Thai currency will breach its resistance level since exporters are waiting to sell the dollar and foreign investors are reluctant to short the baht amid expectations it will strengthen.
Poon cautioned, however, that the low level of year-end transactions in the currency market could see the baht fluctuate heavily or in a wide range.
Meanwhile, lower-than-expected US jobless claims should ease market worries of another US Federal Reserve interest rate hike that would support further dollar strengthening, Poon said.
But he forecast the dollar would be buoyed if investors’ worries over the Covid-19 situation in China eased.
He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency mark.
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