Baht might weaken amid worries over US Fed rate move: market strategist
The baht opened at 34.37 to the US dollar on Thursday, skidding slightly from Wednesday’s close of 34.34.
The currency is expected to move in a range between 34.30 and 34.50 on Thursday, predicted Krungthai Bank market strategist Poon Panichpibool.
Poon said the baht might fluctuate and weaken during the day as the dollar strengthens over concern that the US Federal Reserve might increase the interest rate to bludgeon inflation.
Meanwhile, investors have unloaded the baht, recently selling short term bonds worth THB3.8 billion, he noted.
The baht might test its resistance level of 34.40-34.50 to the dollar because of these transactions and stock sales, he added.
However, the baht will not weaken much past its resistance level as exporters are waiting to sell the dollar, Poon said.
China’s Covid-19 situation is also not worrying while the Chinese government eases lockdown measures, keeping EM Asia assets from being sold in large amounts.
Poon said the baht would move between 34 and 34.50 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.
