Baht set to test its resistance level as dollar bounces back
The baht opened at 35.70 to the US dollar on Tuesday, weakening from Monday’s close of 35.66. The currency is expected to move in the range of 35.60 to 35.80 during the day, Krungthai Bank market strategist Poon Panichpibool said.
He reckons the baht will likely fluctuate and test its resistance level from 35.75 to 35.80 to the dollar because the greenback is strengthening and the market is in a risk-off state, resulting in foreign funds flowing out of the country, especially stocks.
Poon has also advised investors to beware of short-term bond sales if the rate of inflation is higher than expected. Investors expect the Monetary Policy Committee to increase the interest rate.
However, the currency’s weakening may be limited by exporters waiting to sell the baht at the key resistance level, and investors waiting to buy gold on dips.
Poon advises investors to use hedging tools like options to manage their risks in the highly volatile currency market.