Thai baht plummets even further against US dollar
The Thai baht depreciated even further against the strengthening US dollar. Last month, the baht plunged to 38 to the dollar for the first time in 16 years. Today, US$1 is worth 38.35 baht.
Market strategist at Krungthai Bank Poon Panitphiboon revealed that the baht weakened from 38.25 yesterday to 38.35 against the dollar this morning.
As US bond yields rose sharply, the US dollar rose against all currencies.
The dollar has flown in 2022 amid the Federal Reserve’s aggressive interest rate hikes, Europe’s energy crisis, and China’s Covid-19 lockdowns. The Federal Reserve may raise interest rates again by 0.75% in the remaining two meetings of the year to combat inflation.
Economists predict that the baht will fall further but shouldn’t breach its key resistance level of 38.50 to the dollar.
The US 10-year Treasury yield has risen over the 4% mark continuously, causing foreign investors of Thailand’s long-term bond yield to sell their bonds, depreciating the baht’s value.
Since the beginning of the week, net bond sales amounted to 10 billion baht.
In addition, a drop in gold prices may cause the baht to depreciate further amid the current gold transaction flow.
Not to worry, Thailand’s Finance Minister Arkhom Termpittayapaisith said a weaker baht is supportive of Thailand’s post-pandemic tourism recovery.
Arkhom said the baht’s weakness is “surely” going to lure foreigners into the kingdom. He said, “Thailand is value for money.”
However, Cambridge University economist Mohamed El-Erian said the strength of the US dollar is bad news for the world economy…
“What is clear is we have this relentless increase in yields, this relentless appreciation of the dollar. They are both bad news for corporates and the economy.”
Click here to find out live Thai baht exchange rates.
