Baht ‘may strengthen’ on hopes economy would recover soon
The baht opened at 35.16 to the US dollar on Wednesday, weakening from Tuesday’s close of 35.08.
The currency is expected to move between 35.05 and 35.25 during the day, predicted Krungthai Bank market strategist Poon Panichpibool.
He said the currency market is fluctuating widely due to concerns that the economy might shrink or even enter a recession, increasing demand for the dollar and pressuring the Thai currency to weaken.
However, the baht may strengthen on hopes that the Thai economy would recover soon after China eases Covid-19 prevention measures. Also investors’ hopes that Chinese tourists would be able to travel to Thailand might help the baht to advance.
However, Poon said, a strengthening of the baht is not sustainable as investors are waiting to sell the currency when it reaches the support level of 35-35.10 to the dollar.
Moreover, he speculated, it is too fast for the Chinese government to allow travel abroad right now. He expected the country to allow international travel only at the year-end.
Poon advised investors to use hedging tools such as options to manage their risks in the highly volatile currency market.