Thai baht’s unexpected surge makes a splash, takes the lead in Asian currency gains

Picture courtesy of vecstock, Freepik

In an unexpected buoy of currency today, the Thai baht took the lead in Asian currency gains, reaching a two-month apex. This surge, of 0.9%, comes in the wake of strong hopes for the resolution of Thailand‘s political deadlock and a waning US dollar, factors that buoyed the sentiments of investors.

Meanwhile, share market traders adopted a cautious stance; local shares saw a slight uptick of 0.2%.

Pita Limjaroenrat, leader of the Move Forward Party (MFP) and candidate for prime minister, emerged as an unforeseen victor in the General Election held on May 14.

Pita yesterday announced that the eight-party alliance, which aims to form the impending government, reasserted their support for his prime ministerial candidacy.

Related news

Poon Panichpibool, a markets specialist at Krungthai Bank, offered insights.

“Hopes for a political resolution are positively influencing foreign investor sentiment, which is driving the value of the baht. Mild gains are anticipated for the currency in future.”

The US dollar index demonstrated a drop of 0.15% in the Asian trade, settling at 99.753. This index gauges the greenback against six other currencies, and this decline sees it hovering near the historic low it hit last Friday.

Despite this, analysts at OCBC, in their briefing, expressed a semblance of optimism.

“Though some consolidation is expected ahead of next week’s Federal meeting, a firm US activity print could support the US dollar.”

An announcement by Thailand’s Ministry of Tourism and Sports today indicated that approximately 14.15 million foreign visitors have graced the country from early January to mid-July. The anticipation is that this number will surpass 15 million by month-end.

In related news, after the central bank fixed the daily midpoint rate at 7.1453 per dollar (a 0.18% reduction on the last fix), the Chinese yuan made marginal gains. However, data unveiled yesterday showed a weak growth trajectory for China’s economy in the second quarter owing to dwindling domestic and foreign demand.

OCBC analysts warned that “the yuan can enjoy respite when the US dollar trend dips, China’s issues will persist.” They underline the need for stimulus measures to support the property sector and domestic demand.

Other notable Asian beneficiaries include the South Korean won, which had a 0.4% rise, despite a corresponding easing from the local share market by the same percentage.

Analysts at Maybank offered views on prospects.

“We are optimistic about the likelihood of China picking up steam as the year progresses, which could positively influence the won and strengthen Asian currencies.”

Across the region, whereas Singapore and Indonesia stocks underwent losses of 0.2% and 0.5% respectively, stocks in the Philippines registered a marginal gain of 0.1%.

Business NewsThailand News

Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.

Related Articles