Uncertainty over economic recovery still affecting baht

The baht this week will likely move between 31.45 and 31.60, said Krungthai market strategist Poon Panichpibool.

He said currency market uncertainty over an economic recovery amid a so-called second Covid-19 wave in Europe and the virus situation in the US are still affecting the baht.

“The market recently reduced investment in dollar-holding assets due to the US Federal Reserve’s gloomy economic recovery forecast, the slowdown in Europe and US service-sector recovery,” he said.

Poon said the European market expects the German IFO Business Climate Index to rise to 93.8 points as the country’s manufacturing sector continues to expand despite the Covid-19 situation.

“Meanwhile, US markets expect the number of initial jobless claims to drop to 850,000,” he said.

“However, if the economic data is worse than expected, the market may turn into a risk-off state, causing the dollar to strengthen further.”

Poon believes the baht will not weaken in line with the strengthening dollar because exporters aim to sell the US currency when the baht weakens below 31.50 per dollar.