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Baht may strengthen slightly with market in risk-on state: strategist
THURSDAY, NOVEMBER 24, 2022
The baht opened at 36.00 to the US dollar on Thursday, strengthening from Wednesday’s close of 36.27.
The currency will likely move between 35.85 and 36.15 against the greenback during the day, Krungthai market strategist Poon Panichpibool predicted.
He said the baht has support to strengthen as the market is in a risk-on state. Meanwhile, the rising gold price has led investors to sell the precious metal for profit.
Poon, however, expected the baht not to strengthen further than its support level of 35.80 to 35.90 to the dollar because importers are likely to purchase more of the greenback at the end of the month, especially once the baht strengthens.
Furthermore, foreign investors are selling their Thai assets for profit, which will also slow the strengthening of the baht.
Poon suggested a close watch on the country’s trade report. If exports were seen to grow greater than expected and the trade deficit was lower than market expectations, the baht could strengthen further.
However, he felt the global economy is slowing, so it is hard for Thai exports to grow greatly. This means investors should beware of the risk that the baht could weaken especially if exports and the trade deficit are worse than expected.
Poon advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.