Baht gains against dollar, but experts see limited potential for further appreciation
The baht opened at 34.65 to the US dollar on Wednesday, strengthening from Tuesday’s close of 34.78.
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 might strengthen due to the weakening dollar and gold sales, but it would not strengthen past its support level of 34.5 to the dollar because the currency market is fluctuating and foreign investors could sell more Thai stocks after net sales of 1.7 billion baht on Tuesday.
Moreover, foreign investors could also sell Thai long-term bonds as the global bond yield is increasing.
He believes that some of them might wait for the baht to reach close to its support level to short for profit following net sales of 8 billion baht of short-term bonds this week.
Poon also advised investors to use hedging tools, such as options, to manage risks in a highly volatile currency market.
