Baht defies expectations by rising further on Tuesday
The baht opened at 35.71 to the US dollar on Tuesday, strengthening from Monday’s close of 35.94
The currency will likely move between 35.60 and 35.85 against the greenback during the day, Krungthai market strategist Poon Panichpibool said.
Poon said the baht has strengthened more than expected but the market is still cautious and foreign investors might gradually sell Thai stocks and bonds.
He advised to beware of volatility in the currency market if Chinese economic data is worse than expected, which would pressure the yuan to weaken soon after being buoyed by the easing of zero-Covid measures.
A weakening yuan would place downward pressure on the baht.
Poon said however that any baht weakening would be limited as the Thai currency is still being supported by gold transactions. He forecast the baht’s resistance level at 36 to 36.20 to the dollar and its support level at 37.50 to 37.60.
He also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.