Foreign funds flows, Treasury yield impact on dollar to determine baht direction

The Thai currency is likely to move between 30.50 and 31.00 this week and between 30.65 and 30.80, Krungthai Bank market strategist Poon Panichpibool said.

He said the direction of US Ten-Year Treasury yields still affected the dollar.

The market strategist explained that the dollar would continue strengthening if the yields rise. The risk-off market situation had led to investors holding more and more dollars, in order to avoid volatility. This had led to emerging market currencies weakening.

He added that the Thai currency could weaken up to 31.25 at this time. He also warned investors about the sales of stocks, as some market players tended to lose confidence in the Thai situation, due to the delays in vaccination and the new cluster in Bangkok’s Bang Khae area.

However, it was possible the Thai currency would strengthen again if the dollar weakened and foreign funds flowed back into the Thai capital market, he said.