Baht expected to move sideways as investors await clarity on various issues
The baht opened at 32.50 to the US dollar on Tuesday, weakening from Monday’s closing rate of 32.45.
The Thai currency is likely to move between 32.40 and 32.55 during the day, Krungthai Bank market strategist Poon Panichpibool said.
Poon predicted that the baht would drift sideways in the short term. Investors are waiting for many new factors, especially the Covid-19 situation in the country, which had led to many foreigners selling Thai assets -- stocks and bonds.
Investors are waiting for the European Central Bank’s meeting, as it might signal a decrease in quantitive easing (QE), which will affect the currency. Currently, the trend of the euro and dollar are not clear yet.
Poon added that the International Monetary Fund is disbursing US$650 billion to help members under which Thailand will get $4.4 billion (THB130 billion) as special drawing rights. He said investors should speculate how the government and the Bank of Thailand would use the funds to support the economy and solve the Covid-19 situation.
He recommended that investors use various hedging tools if they feel uncertain about the direction of the currency.