Baht plummets against dollar on Tuesday
The baht opened at 35.03 to the US dollar on Tuesday, plummeting from Friday’s close of 34.75 after the Father’s Day holiday on Monday.
The currency will likely move between 34.90 and 35.10 against the greenback during the day and between 34.50 and 35.20 during the week, Krungthai market strategist Poon Panichpibool said.
Poon said the baht could weaken further as the dollar strengthens and cautioned investors to keep a close watch on Asian assets and currency sales in the short term.
He said the market has reverted to a risk-off state, and purchases of gold if the price falls would pressure the baht to weaken further.
Poon said the dollar is likely to strengthen if the market remains in a risk-off state as investors are concerned that the US Federal Reserve could increase the interest rate, especially if the US producer price index shows inflation is not slowing much.
The dollar could also be supported if China’s Covid-19 situation worsens and Beijing is unable to relax more disease control measures.
Poon also advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
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