Baht slides on Fed movements

The baht fell by its biggest margin in almost two weeks Thursday as speculation the US Federal Reserve will scale back its bond buying dampened demand for emerging-market assets.

  • Published: 23/05/2013 at 07:33 PM
  • Newspaper section: breakingnews

The retraction of the baht's movements has come after it dropped below 30 per dollar for the first time since January, and the latest movement occurred after a report showed China's manufacturing is contracting in May for the first time in seven months.

Earlier, Fed chairman Ben Bernanke had said on Wednesday the central bank may taper its US$85 billion a month of purchases if it remains confident of a sustained improvement in the US economy, signalling a drop in the baht.

Thailand's first-quarter growth trailed analysts' estimates, boosting the odds that policy makers would cut borrowing costs next week to curb inflows that had helped push the baht to a 16-year high last month.

The baht dropped 0.6%, the most since May 10, to 29.98 per dollar as of 3.17pm, according to data compiled by Bloomberg. It declined 0.4% this week, paring its gain this year to 2%, the best performance in Asia.

The currency reached 28.56 on April 19 and 22, the strongest level since July 1997. Onshore markets will be shut on Friday for Visakha Bucha Day.

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