Baht drops to lowest level in weeks as investors move money out
The baht opened at 31.73 to the US dollar on Friday morning (July 17), weakening from Thursday’s close of 31.69, falling to its lowest since the beginning of June.
The Thai currency is expected to move between Bt31.67 and 31.87, said Jitipol Puksamatanan, head of Markets Strategy at SCB Securities.
“The baht continues to weaken due to foreign investors’ mass sell-offs to take profits in response to uncertainty following the second coronavirus wave and the Cabinet reshuffle,” he said. “We expect the baht to recover after industry and tourism sectors across the Asian region resume their operation.”
On Thursday night, the financial markets were unchanged. The price of technology shares decreased after many listed companies announced their second quarter performance. The S&P 500 fell by 0.3 per cent, while Stoxx Euro 600 fell by 0.5 per cent.
“The US number of initial jobless claims stood at 1.3 million positions although the number of continuing claims dropped to 17.3 million positions, showing that the labour market recovery was slower than expected,” Jitipol pointed out.
“Meanwhile, the European Central Bank still maintains its monetary policy, injecting liquidity of €1.35 trillion into the system to stimulate the economy and is retaining the interest rate at minus 0.5 per cent.”
The US dollar strengthened by 0.3 per cent as investors turned to safe haven assets because the stock market is still high risk and the price of oil dropped by 1.1 per cent due to uncertainty after large oil manufacturers declined to cut oil production. However, the Australian dollar weakened the most by approximately 0.5 per cent.
