Thai baht may strengthen more next week

BANGKOK, 16 January 2010 (NNT) – The Kasikorn Research Center (KRC) has reported that the onshore Thai baht currency has edged higher against the US dollar to be near 32.80 THB/USD.

The baht reached the highest level for the first time in 19 months, according to the research center. The appreciation was speculated to be caused by the Bank of Thailand’s (BoT) efforts to prevent the currency from fluctuating further.

The Thai currency has appreciated throughout the week, from 11-15 January 2010, in line with other Asian currencies. The appreciation was in part due to the US’ economic figures which are lower than expected. The baht also got support from the selling of the US dollars and foreign investors’ buying of Thai stocks.

On Friday, the baht strengthened, closing at 32.87 THB/USD when compared to 33.15 THB/USD on last Friday, 8 January 2010. The KRC forecast that next week, from 18-22 January 2010, there will be no factor which can significantly affect the liquidity of the financial market, making it more likely that the short term interest rate will be stable at 1.25%.

The baht is expected to move in a narrow frame of 32.70-33 THB/USD. Factors to be monitored include Thai export reports in December 2009 by the Commerce Ministry, the direction of the THB currency, regional stock markets, and signs for currency measures issued by the BoT.