Baht unlikely to weaken much: market strategist
The baht opened at 34.31 to the US dollar on Wednesday, heading south from Tuesday’s close of 34.24.
The currency is expected to move in a range between 34.20 and 34.40 on Wednesday, predicted Krungthai Bank market strategist Poon Panichpibool.
Poon said currency market volatility might increase due to uncertainty whether the US Federal Reserve would increase the interest rate amid inflation worries, causing the dollar to strengthen and the baht to weaken.
He said some investors have unloaded the baht so it might test its resistance level of 34.40 to the dollar.
However, it will not weaken past the resistance level much as exporters are waiting to sell the dollar.
Moreover, foreign transactions have not flown out of Thailand in large amounts as both the Thai and Chinese economies are improving, which will decrease the pressure on EM Asia assets if the market goes into a risk-off state, he noted.
Poon said the baht would move between 34 and 34.40 to the dollar until new factors emerge.
He advised businesses to use hedging tools such as options to manage risks in the highly volatile currency market.
