Baht forecast to yo-yo between 34 and 34.4/dollar this week

The Thai currency is expected to move between 34 and 34.20 per dollar during the day and between 34 and 34.40 during the week, Krungthai market strategist Poon Panichpibool said.

The baht might rise in value past the support level of 34/dollar if the market continues to open to risks, he added. However, any rise would be limited as importers are waiting to buy the dollar at the support level.

Moreover, foreign investor inflows to Thailand may sluggish until new factors emerge.

Poon said that the dollar could face pressure if the market opens to more risk and the US Federal Reserve does not hasten to increase the interest rate. Meanwhile, the European Central Bank’s signal it will hike the interest rate could pressure the dollar as the euro is strengthening.

He said the currency market is highly volatile due to several factors, including the Russia-Ukraine conflict, the Covid-19 situation in China, and concern about the Fed’s financial direction.

He advised businesses to use hedging tools such as options to manage risks in the highly volatile currency market.