Sliding baht drops closer to key level of 34 per dollar
The baht opened at 33.71 to the US dollar on Tuesday, weakening from Monday’s close of 33.66 and sliding towards the key 34 per dollar level. Breaching that closely watched resistance level would invite further losses for the Thai currency.
Krungthai Bank market strategist Poon Panichpibool predicted the baht would move between 33.65 and 33.80 per dollar during the day.
Poon said the Thai currency would likely continue to swing sideways, pressured by the strengthening dollar after the US Federal Reserve signalled it would hasten to tighten monetary policy, as well as short-term demand for safe assets.
Meanwhile, dividend transactions worth 4-5 billion baht this week could add pressure on the baht.
However, sales of gold after its price increased to the key resistance level might support the baht, limiting losses in this period.
He expected exporters to sell the dollar at 33.70 to 33.80 as long as the market does not turn heavily risk-averse, which would add pressure to the baht.
With high volatility in the currency market, businesses should use hedging tools like options to manage risks, he said.
