Thailand's baht fell to within 0.4% of a nine-month low and bonds dropped as investors waited for a signal from the US Federal Reserve on the future of its stimulus program that has spurred fund flows to emerging markets.
Fed Chairman Ben S Bernanke will speak to reporters at the end of the monetary authority's two-day meeting on Wednesday. Global investors have pulled US$2.6 billion from Thai bonds and equities since May 22, when Bernanke said $85 billion a month of debt purchases could be reduced if there is a sustained improvement in the US jobs market. The benchmark SET Index of shares lost 12% during the same period.
"Investors don't want to take positions on risky assets at this moment," said Pareena Phuangsiri, a Bangkok-based analyst at Kasikornbank Plc. "Domestically, sentiment is not so good either with the SET Index falling. Foreign selling of bonds and stocks also weigh on the baht."
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