Thai baht falling over Omicron fears and strong US dollar

As the Covid-19 pandemic drags on, it’s not just our patience and our resolve that is weakening. The Thai baht is falling too, weakening against a stronger US dollar and global fears over the impact of the Omicron variant rapidly spreading throughout the world.

Today the conversion rate stands at 33.59 baht to the US dollar just off of its peak in December of 33.7. The Thai baht had been slowly gaining ground on the US dollar, as 5 years ago the conversion rate was above 35 baht to the dollar. At around this time last year in late January the rate had peaked as low as just under 30 baht.

A market strategist for Krungthai Bank says that Thailand can expect to see its currency fluctuate between 33.45 and 33.65 baht to the dollar throughout the day. The strategist said that the baht is suffering under Covid-19 Omicron uncertainty as well as a US dollar growing stronger.

As Thailand takes actions piling on restrictions and delaying any relaxation of Covid-19 rules in the face of the rapidly spreading Omicron variant, investors – and especially foreign investors – are watching the markets like hawks for signs of weakness. After raising the Covid-19 alert level to 4 yesterday, predictions of financial losses and economic downturns could spook foreign investors to pull out of the Thai market, at least in the short term.

The market strategist said that so far foreign investors haven’t sold out in any major numbers but the market is in a risk-off state, so foreigners may look to sell Thai stocks or reduce assets in the country in the coming days.

SOURCE: Nation Thailand