Baht likely to strengthen after lockdown easing, but could weaken if new wave hits: market strategist
The baht opened at 32.23 to the US dollar on Wednesday, unchanged from Tuesday’s closing rate.
The Thai currency is likely to move between 32.10 and 32.30 during the day, Krungthai Bank market strategist Poon Panichpibool said.
The baht was likely to strengthen due to a hopeful economic recovery from an easing of the lockdown, which prompted foreigners to invest in Thai assets last week, he said.
Poon is however still concerned about the Covid-19 situation in Thailand, as he is not sure if the present pandemic wave has been contained because “not enough proactive testing is being carried out”.
The infection rate in Thailand is higher than 20 per cent, he said, while the World Health Organisation recommends it should be lower than 5 per cent.
Poon said there was room for the baht to fluctuate and weaken as the situation did not clearly point to an improvement.
He suggested keeping an eye on the virus situation 3-4 weeks after the first week of lockdown easing.
The baht might weaken if there is a new wave, he noted.
However, the Thai currency might strengthen to the key support level of 32 to the US dollar if foreigners invest to support the baht in the short term, he added.