Baht rises to 7-month high
The baht opened at 32.14 to the US dollar on Friday, strengthening from Thursday’s close of 32.18 to its highest level in seven months.
The Thai currency is likely to move between 32.10 and 32.20 during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon said that the baht was supported by gold trading and foreign inflows to the Thai stock market, even though the currency market is in a risk-off state.
Moreover, the baht has risen past the key support level, causing some exporters to sell dollars which is allowing the baht to strengthen.
He said these factors – especially gold trading due to risks from the Ukraine crisis – would continue to support the Thai currency.
He added that if the crisis eases, the baht could weaken, triggering sales of energy stocks and foreign outflows from Thai stocks.
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He advised keeping a close watch on the Omicron situation as rising cases and bed occupancy rates could pressure the public health system. He said the worst-case scenario would see the government tightening prevention measures again.
A further sudden rise in the baht could trigger controls by the Bank of Thailand, he added.
He concluded that the currency market is highly volatile and in a risk-off state after the US emphasised that Russia could attack Ukraine at any time. Investors are choosing to cut risks and seek “safe havens” such as the dollar, Japanese Yen, gold, and government bonds.
