Thailand's baht fell toward a three-year low and government bonds declined after a surprise drop in exports added to concern Southeast Asia's second-largest economy will struggle to emerge from a recession this quarter.
Overseas sales decreased 1.5% in July, the third decline in a row and less than the 0.8% gain forecast by economists surveyed by Bloomberg, a report showed on Monday.
The country will post a current-account deficit of US$550 million in July, according to another Bloomberg survey before data due Aug 30, while figures released last week showed the nation entered a recession for the first time since 2009.
"The trade data boosted concern about the possibility of economic recovery in the third quarter," said Tohru Nishihama, an economist covering emerging markets at Dai-ichi Life Research Institute Inc in Tokyo. "In addition, the nation has been seeing a deficit in the current-account balance, putting downward pressure on the baht for a while."
The baht dropped 0.5% to 32.09 per dollar as of 8.45am in Bangkok, according to data compiled by Bloomberg. The currency touched 32.17 on Aug 22, the weakest level since Aug 5, 2010, and has lost 3.2% this quarter. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, declined seven basis points, or 0.07 percentage point, to 7.13%.
Gross domestic product decreased 0.3% in the three months through June from the previous quarter, when it contracted 1.7%, the National Economic and Social Development Board (NESDB) said Aug 19. The agency cut its 2013 expansion forecast to between 3.8 percent and 4.3% from an earlier estimate of 4.2% to 5.2%.
Global funds sold $1.2 billion more Thai bonds than they bought this month through on Monday and pulled a net $1.1 billion from equities, official data show.
The yield on the 3.625% sovereign notes due June 2023 rose four basis points to 4.19%, data compiled by Bloomberg show.