Bangkok: The baht achieved its strongest position in more than seven and a half months, reaching 32.38 baht per dollar this morning. It later adjusted to 32.40-32.42 baht per dollar compared to the previous closing level of 32.58 baht per dollar last Friday. Market participants are eagerly awaiting April's export figures, which are expected to show growth exceeding 12%.
According to Thai News Agency, Ms. Kanchana Chokpaisansin, Research Director at Kasikorn Research Center, indicated that the baht's strength is aligned with net buying signals of Thai bonds by foreign investors and the appreciation of other Asian currencies. Meanwhile, the US dollar faced selling pressure, with the dollar index dropping below 99, its lowest level in about a month, after US President Donald Trump postponed the imposition of 50% tariffs on the European Union to July 9. The baht's movement range today is initially estimated at 32.30-32.70 baht per dollar, with critical factors to monitor including Thailand's April export figures, global gold price trends, foreign fund flows, and trade war developments.
Mr. Poon Panichpiboon, Strategist at Krungthai GLOBAL MARKETS, Krungthai Bank, noted that the baht's strengthening followed the dollar's decline. This coincided with an increase in gold prices, which adjusted above a short-term resistance zone of $3,350 per ounce. However, despite the dollar's stability during the Asian market morning session, profit-taking in gold led to a price drop, exerting pressure on the baht.
Last week, despite positive US economic data, concerns about US fiscal stability continued to weaken the dollar by around 2%. Market players are now awaiting further economic data from the US and statements from Federal Reserve officials, particularly Fed Chairman Jerome Powell.
In Thailand, analysts predict that April's exports could grow by more than 12% due to accelerated imports ahead of US trade barriers. However, while exports have expanded, the industrial production sector faces challenges. Structural issues and competition from cheaper Chinese products are expected to cause a 3.5% contraction in the Industrial Production Index for April, with the capacity utilization rate remaining around 63%.
The baht's momentum of appreciation appears stronger than previously assessed. It is suggested that market players employ a broader range of hedging tools to manage exchange rate risks amidst increased currency volatility. Options or Local Currency hedging, alongside Forward contracts, are recommended. The baht is anticipated to fluctuate between 32.15-32.95 baht per dollar this week.