Baht could rebound on China lockdown easing: market strategist

The Thai currency is expected to move between 34.25 and 34.45 per dollar during the day and between 34.10 and 34.50 during the week, Krungthai market strategist Poon Panichpibool said.

Poon said that the baht might strengthen slightly at the beginning of the week as the Asian market is in a risk-on state after China eased lockdown measures.

The baht would also be supported if the Bank of Thailand’s Monetary Policy Committee decides to increase the interest rate quickly, he added.

However, any rise in the currency baht would be limited by concern that the US Federal Reserve will hike the interest rate at its upcoming meeting as per its so-called dot plot projection.

Poon said the dollar could strengthen if US inflation is higher than expected, triggering concern of a big Fed hike.

However, he advised investors to watch for a European Central Bank (ECB) interest rate hike, as this would support the euro and promote dollar weakening.

Poon 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 turbulent currency market.