Baht breaks below 31 per dollar as inflows gather pace

The baht has strengthened again, breaking below 31 per US dollar and marking its strongest level in a week, after Donald Trump’s global 15% tariff move weighed on the US dollar. Kasikornbank and Krungthai Bank said the baht could continue to strengthen on capital inflows, the export outlook and a surge of investment flowing into Thailand.

The latest movement in the exchange rate showed the baht strengthening and breaking below 31 per dollar on February 23, supported by two key factors: a sharp rise in gold prices amid geopolitical uncertainty, and a weaker US dollar.

At the same time, foreign capital has continued to flow into Thai assets, reflecting buying pressure across the region.

Dr Kanjana Chokpaisalsilp, a research executive at Kasikorn Research Center Co Ltd, said the baht’s move below 31 per dollar has been driven mainly by two factors: a recovery in gold prices and the dollar’s direction.

On gold, she said prices rebounded due to geopolitical uncertainty, particularly the conflict between the United States and Iran, which pushed gold prices sharply higher, breaking above key resistance levels beyond $5,000–$5,100 an ounce.

She said the sharp rise in gold prices has directly resulted in the baht strengthening as well.

“Baht strongest in a week”

She said another factor that markets have refocused on is the dollar, following the Supreme Court’s interpretation of Trump’s powers. This has created continued uncertainty, leading markets to see potential negative effects on the US economy, causing the dollar to weaken.

Looking at the baht’s appreciation, she said it has strengthened continuously since Friday at around 31.19 per dollar, then moved to test support at 31.00. The strongest level observed was around 30.96–30.98 per dollar, the firmest in a week.

Comparing currencies in the region, she said the baht was the third-strongest at 1.7%, behind the ringgit at 4.4% and the peso at 2.2%.

For the baht’s direction ahead, she said the currency could strengthen further if economic uncertainty becomes clearer, prompting markets to view that the Fed may need to cut rates more than twice. This scenario, she said, has not yet been priced into the dollar’s current direction. She estimated the short-term baht range at 30.70–31.60 per dollar.

She added that the baht’s volatility has increased over nearly the past two months. Compared with last year’s volatility of about 7.1%, volatility from the start of this year to the present has risen to 7.6%, reflecting more severe swings up and down than before.

“Baht below 31” driven by overseas factors

Sanguan Jungsakul, an executive in Krungthai Bank’s treasury markets business, said the baht has moved below 31 per dollar again, driven mainly by external factors, especially the strength in gold prices, which have risen sharply.

He said the dollar index has weakened, and issues including US–Iran tensions have helped safe-haven assets such as gold outperform, which has become a factor pushing the baht stronger.

He said US economic policy is increasingly being questioned and facing more challenges, meaning Trump’s ability to use sweeping powers has diminished. Markets may therefore see that some policies, such as setting very high import tariffs, may not be implemented as fully as in the past, which could affect long-term confidence in the dollar.

At the same time, he said domestic factors have clearly carried more weight on the baht this year. Thailand’s exports have not been as bad as many had worried, and the country still holds a trade surplus.

He also cited supporting factors from foreign direct investment (FDI), particularly in data centres backed by the Board of Investment (BOI), which is positive for the economy and the baht.

He added that capital has flowed into both the stock market and the bond market, with the combined total exceeding 100 billion baht in less than two months.

That, he said, has supported the baht in line with regional currencies that are also benefiting from heavy inflows. Such massive inflows are a key driver behind the baht’s appreciation, and the move is consistent with the direction of most regional currencies, which have also strengthened recently.

He said this aligns with international reserves reaching new record highs continuously, most recently at $312 billion, up from around $305 billion at the end of last year—an increase of $7 billion in just one month.

Looking at reserves in the form of gold, he said they rose only 13%, in contrast with more than 20% growth in US dollar assets, suggesting the central bank intervened by buying dollars to slow the baht’s appreciation. He said this reflects the use of resources to directly manage currency volatility.

He said there is a high chance the baht will strengthen in the first quarter and could test 30.80 per dollar, based on a dollar trend expected to remain steady until the second half of the year. However, he said it remains difficult to see the baht break below 30 per dollar.

Baht seen firm as Trump tariff uncertainty lingers

Dr Amonthep Chawla, assistant managing director and head of research at CIMB Thai Bank, said in the first quarter of 2026 the baht is likely to strengthen due to uncertainty over US tariff policy. That uncertainty could trigger selling of US assets and a shift into emerging markets.

He said early-year market expectations for Fed rate cuts—forecast to happen twice more in June and September—could weaken the dollar and support a stronger baht in the short term.

On domestic factors, he said confidence in the government’s stability and economic stimulus measures could positively affect investor confidence, drawing more investment into Thai assets.

He added that the acceleration in gold prices recently has also supported the baht.

However, he said the Bank of Thailand and the Finance Ministry’s policies to maintain financial stability should help reduce currency volatility related to gold trading, meaning the baht could weaken in the second half of the year.