Baht bolstered by weakening dollar, mass dumping of gold
The baht opened at 35.05 to the US dollar on Friday, strengthening from Thursday’s close of 35.16.
The currency is expected to move between 34.95 and 35.20 on Friday, predicted Krungthai Bank market strategist Poon Panichpibool.
He added that a weakening dollar and mass sale of gold may make the baht fluctuate and strengthen.
However, he said, the value of the baht may weaken if foreign investors sell Thai assets, especially stocks, due to concerns and confusion over Thai monetary policies.
Some investors also expect the Monetary Policy Committee (MPC) to hold an urgent meeting to increase the interest rates even though there has been no indication of that happening.
Poon also believes the Bank of Japan’s moves to ease monetary policies may weaken the yen and baht.
If the baht does weaken, he said it will be limited to between 35.10 and 35.20 to the dollar, allowing exporters to sell their dollars.
He advised speculators to watch the baht’s direction closely as there may be some factors that cause the baht to weaken to test the resistance level of 35.50.
However, he does not expect this to happen unless a lockdown is widely enforced in China, forcing investors to dump assets in emerging Asia markets.
Poon advised investors to use hedging tools like options to manage their risks in the highly volatile currency market.