Cheaper gold, stronger dollar may see baht swinging sideways
The baht opened at 35.66 to the US dollar on Friday, weakening from Thursday’s close of 35.62.
The currency is expected to move between 35.55 and 35.75 during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
He said the currency will likely fluctuate and weaken as it has gone past the resistance level of 35.60 to the dollar due to the strengthening greenback and also because foreign investors sold off short-term bonds worth 5.2 billion baht.
Moreover, investors are also buying up gold as it is cheaper, which in turn is pressuring n the baht to weaken.
However, even though the dollar has strengthened by almost 1 per cent and is pressuring the baht, he speculates that it may swing sideways unless there is a new factor.
He said investors are waiting for the Central Banks’ statements, especially from the US Federal Reserve’s chair Jerome Powell at a seminar in Wyoming next week.
Poon said the new resistance level is from 35.75 to 35.80 to the dollar.
He added that the baht might weaken in the short term, but if it does not weaken heavily or strengthen past 35.15 to the dollar, it might move in a head and shoulders pattern, which means it could strengthen continuously.
