Baht under pressure to weaken: market strategist
The baht opened at 35.80 to the US dollar on Thursday, weakening from Wednesday’s close of 35.63.
The currency will likely move between 35.70 and 35.95 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.
He said the baht is coming under more pressure to weaken as the market has descended into a risk-off state and is therefore supporting the dollar.
Furthermore, foreign investors might offload additional Thai assets for profit so the baht might weaken in the short term, he believed.
Poon suggested keeping an eye on statements from hawkish US Federal Reserve officials as they could cause the market to fluctuate.
Investors are wondering that if the Fed does slow down its interest rate increases, by how much will the rate rise? And is the Fed still deeply concerned about the state of the economy and the rate at which it is slowing?
Poon said mass gold sales could also be a factor in the weakening of the baht.
He expects the currency’s resistance level to be 35.85-36 to the dollar and feels the support level would be 35.50, something most importers are waiting for to purchase the greenback and other foreign currencies.
Poon advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
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