Wednesday, September 23, 2020

Baht weakens against dollar after tough talk by central bank

Jan 20. 2020
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By The Nation

The baht weakened against the US dollar last week and was traded cautiously later in the week after the Bank of Thailand expressed concern about its movement and was ready to announce more measures to stabilise the currency if necessary. 

Meanwhile, the US dollar gained on better-than-expected US retail sales in December and weekly jobless claims data. The baht was also weighed down by net foreign stock-selling orders. However, regional currencies rose along with the yuan after the US removed China from the list of currency manipulators and the first phase of the US-China trade deal was officially signed during the week.

On Friday (January 17), the baht closed at Bt30.37 to the US dollar, after having briefly hit a three-month low of 30.53/USD, versus Bt30.24/USD reported for Friday (January 10).

During the week of January 20-24, Kasikornbank expects the baht to move within a range of Bt30.20-Bt30.60/USD. A key domestic factor to be monitored closely is Thai export data for December. 

Meanwhile, the US economic data to be released during the week include December Existing Home Sales, and November House Price Index. Market participants will also await the outcomes of the Bank of Japan and European Central Bank meetings, signs of the next phase of the US-China trade negotiations, as well as preliminary composite purchase managers index data for January of the US, the euro-zone, and Japan.

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