Bangkok: The Thai baht has reached a significant milestone, opening this morning at 31.12 baht per US dollar, marking its strongest position in four and a half years.
According to Thai News Agency, Krungthai Bank forecasts that the baht will maintain its strength throughout the first quarter of 2026, while global gold prices have also soared to new record highs.
Mr. Poon Panichpibul, a strategist at Krungthai GLOBAL MARKETS, Krungthai Bank, explained that the Thai baht's recent strength can be attributed to several factors, including the weakening of the US dollar. This depreciation followed a reversal in the Japanese yen's trajectory, which had been experiencing a downturn. The baht is anticipated to trade within the range of 31.05-31.20 baht per dollar over the next 24 hours.
The upward momentum of the Thai baht has been further bolstered by the unprecedented rise in global gold prices. This surge has been fueled by recent geopolitical tensions, such as the ongoing Russia-Ukraine conflict and the US's continued seizure of Venezuelan oil tankers. The combination of these factors has led to a favorable climate for the Thai currency.
Despite the baht's current strength, potential risks could lead to its weakening. These include a shift in market sentiment regarding the US Federal Reserve's interest rate outlook, a decline in gold prices, or domestic economic challenges such as issues in tourism and exports. Mr. Poon suggested that market players might want to consider using options strategies or local currencies to manage exchange rate risks amid these uncertainties.
Globally, the Gold Spot price has reached a new high of approximately US$4,483.50 per ounce, leading to a notable increase in gold prices in Thailand as well. However, due to the strong baht, the local gold price has not surpassed previous records. Gold futures in New York have also closed higher, driven by increased demand for gold as a safe-haven asset amid heightened US-Venezuela tensions.