Wednesday, August 05, 2020

Baht opens weaker with potential to slide more

Mar 23. 2020
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By THE NATION

The baht on Monday (March 23) opened at Bt32.83 to the US dollar, weakening from Friday’s close of Bt32.46.

The Thai currency is expected to move at between Bt32.40 and Bt32.70 to the US dollar on Monday, and Bt32.25 and 33.25 this week, SCB Securities senior market strategist Jitipol Puksamatanan said.

On Monday morning, the financial market fluctuated since the US government cannot pass the financial budget of US$2 trillion, aimed at stimulating the US economy in the aftermath of the Covid-19 outbreak. “This caused the S&P500 to fall sharply,” the strategist said.

Meanwhile, the price of Brent crude oil decreased to $25 per barrel, due to lower consumption, while gold price was stable at $1,498 per ounce.

Global bonds have recovered since the Fed has issued daily financial policies. However, the US 10-Year Treasury contracted to 0.81 per cent.

The Bank of Thailand (BOT) has injected liquidity into the system, and also lowered the interest rate. “However, the baht could weaken due to the high-risk in the financial market,” the strategist added.

“This time, we want investors and entrepreneurs not to panic about the baht’s fluctuation. The currency’s weakening level is less severe than that of other neighbouring or emerging markets currencies,” he said. “Moreover, the BOT's recent action has prevented the baht from being volatile and losing investor confidence."

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