Thai baht surges against weakening US dollar
The Thai baht is soaring to its highest level against the US dollar in more than half a decade.
Analysts are expecting the Thai currency to continue marching past the 31 baht to the US dollar mark.
Currency experts believe the baht’s strength could be partly due to the weakness of the US dollar as investors speculate on the current US-China trade talks hoping negotiators will reach some sort of deal soon. They also believe that the US Federal Reserve will keep rates steady for the rest of the year.
The baht remains a strong target for foreign cash inflows due to the high Thai current account surplus, according to analysts.
This year the baht has been Asia’s best performing currency rising nearly 5% so far to 31.07 to the US dollar. This is the highest value against the dollar since late 2013.
Regionally, trailing next behind the baht’s success is the Indonesian rupiah and China’s yuan at 2.3 and 2.2% rise respectively.
The Bank of Thailand governor Veerathai Santiprabhob is quoted in the Bangkok Post voicing concerns over the rapid rise of the baht but insists that the stronger baht doesn’t stem from last December’s .25% policy rate hike.
These comments have been backed up by the Monetary Policy Committee which says the baht’s strength stems mainly due to the weakening US dollar.
