Limited room for baht to strengthen in the short term

The baht this week would likely move between 31.35 and 31.65, said Krungthai market strategist Poon Panichpibool.
On Thursday night, the markets were more ready for risk, with the hope that the US Congress would be able to soon issue financial stimulus policies. Investors' hopes were kindled after the US Fed officials demanded that their government stimulate the US economy.
However, the market is still concerned about the second wave of Covid-19 in the US and EU. This concern is reflected via the purchasing of safe haven assets. Poon explained that the purchase of US government bonds lowered slightly the US Ten-Year Treasury yield.
The strategist also concluded that investors would continue avoiding the risk by holding the dollar, if there was no positive factor in the market, such as good news on Covid-19 vaccine development.
Poom forecast that the baht on Friday would move in line with the yuan. If the yuan strengthened, other Asian currencies would strengthen by 40 or 60 per cent, he explained.
He added that the baht would not strengthen back again in the short term due to the political situation in the country, which was influencing foreign investors’ viewpoint.