Dire Covid situation expected to continue impacting baht
The baht opened at 33.15 to the US dollar on Thursday, weakening from Wednesday’s closing rate of 33.14.
The Thai currency is likely to move between 33.10 and 33.20 during the day, Krungthai Bank market strategist Poon Panichpibool said.
Poon explained that the baht would continue to weaken due to the Covid-19 situation. Importers have also purchased US dollars as they are afraid the baht could weaken quickly and sharply, he said.
Moreover, the baht will continue to weaken until the Covid-19 situation gets better, which is expected to be in early September, Poon added.
He said the dollar would strengthen if the US Federal Reserve implements a strengthened monetary policy and investors hold onto safe-haven assets amid concern about the Covid-19 situation.
The dollar could also weaken if investors felt safe and ready to take risks, he pointed out.
Poon believed the key resistance level was between 33.20 and 33.25 to the US dollar. He also felt the Bank of Thailand would help to decrease baht volatility in the short term. Therefore, the currency would tend to stay between 33.10 and 33.20.
The support level would be between 32.90 and 33.00, which is the price range importers are waiting for as a pullback to close risks, he added.