THURSDAY, March 28, 2024
nationthailand

Weakening dollar, selling off of gold may help baht maintain strength

Weakening dollar, selling off of gold may help baht maintain strength

The baht opened at 36.78 to the US dollar on Friday, strengthening from Thursday’s close of 36.87.

The currency is expected to move between 36.65 and 36.90 during the day, Krungthai Bank market strategist Poon Panichpibool predicted.

He said the baht’s weakening may slow down as the dollar is weakening. Though the Thai currency could still weaken if the market moves to a risk-off state as the baht recently went past its resistance level from 36.70 to 36.80 to the dollar.

Poon said the baht could weaken and test the level of 37 to the dollar if the greenback strengthens when the market is in a risk-off state or if China enforces lockdown measures, which will encourage investors to sell off assets in Emerging Asia markets.

Investors, however, may sell gold once it rises close to its resistance level from US$1,730 to $1,750 per ounce after some investors bought the metal when the price had dropped.

These transactions may slow down the baht’s weakening.

He added that foreign investors may also start buying Thai stocks again as the market is in a risk-on state.

He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.

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