Thai Baht continues to be volatile
After a week of fluctuations last week amid strong selling pressure on the US dollar and bond yields, the exchange rate of the Thai Baht to the US dollar is expected to be volatile again this week, ranging between 34.40 and 34.90 Baht.
Key factors to watch include the statement from the US Federal Reserve chairman to Congress, the direction of foreign capital flows, Thailand’s export data for May, and the political situation in the country.
Initially, the Baht strengthened, while the dollar lacked support as the market waited for inflation data (CPI) from the US and the outcome of the Federal Reserve meeting, the research center of Kasikorn Bank noted. However, the Baht weakened mid-week, going to 34.90 Baht per dollar amid the possibility of two more interest rate hikes in the remaining months of 2023.
This was in line with the overall performance of Asian currencies, led by the Yuan, which faced pressure from weak Chinese economic data and signals of monetary easing from the People's Bank of China. However, towards the end of the week, the Baht strengthened again as the US dollar weakened following the decline in bond yields, closing on Friday at 34.66 Baht per dollar compared to 34.62 Baht the previous Friday,
Between June 12 and 16, foreign investors sold Thai stocks with a net outflow of 2.96 billion Baht and Thai bonds with a net outflow of 13.19 billion Baht.
