Thailand’s baht was set for its fourth weekly decline, the longest losing streak in three months, and bonds fell before US jobs data that may influence expectations for when the Federal Reserve will rein in stimulus.
The baht dropped to a three-year low ahead of data today that may show US employers added 180,000 jobs in August after an increase of 162,000 the previous month, according to the median forecast in a Bloomberg survey of economists. Global investors sold US$31 million more Thai equities than they bought this week through yesterday, exchange data show, amid concern the US is moving closer to a military strike against Syria.
“The biggest focus in the market now is the US employment data to assess the outlook for the Fed’s reduction in stimulus,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Emerging-market currencies and assets are under downward pressure and such severe conditions will probably continue for a while. Syria tensions are adding to weak sentiment.”
The baht lost 0.7 percent this week and 0.2 percent today to 32.37 per dollar as of 8.38am in Bangkok, according to data compiled by Bloomberg. The currency touched 32.41 earlier, the weakest level since July 2010.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, climbed 32 basis points, or 0.32 percentage point, to 7.53 percent this week. The gauge was little changed today.
The US Fed will start to slow its $85 billion a month of bond purchases at its Sept 17-18 meeting, according to 65 percent of economists surveyed by Bloomberg last month. The US Senate Foreign Relations Committee voted 10-7 this week in favour of a resolution authorising limited action against Syria.
The yield on Thailand’s 3.625 percent sovereign bonds due June 2023 rose 10 basis points from a week ago and two basis points today to 4.42 percent, data compiled by Bloomberg show. That is the highest level for a benchmark 10-year note since November 2009.