Baht hits 6-month high against dollar after US Fed meeting
The baht opened at 34.53 to the US dollar on Thursday, strengthening from Wednesday’s close of 34.57 to a six-month high.
The currency will likely move between 34.50 and 34.70 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.
Poon said that the baht strengthened on dollar weakening and gold sales but cautioned the Thai currency could weaken if foreign investors begin selling Thai stocks due to a risk-off state in the US and Asian currency markets.
Moreover, foreign investors may begin selling Thai short- and long-term bonds amid dropping yields, especially after the US Federal Reserve approved a half-point interest rate hike on Wednesday. The baht had fallen to 34.745 about an hour after the start of trading on Thursday.
Poon estimated the baht’s key support level at 34.50 to the dollar.
He doubts the baht will weaken past its resistance level at 35 as most investors are waiting to sell the dollar or short the dollar-baht market.
Poon also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
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