Baht tests 7-month low on continued outflows
published : 24 Jun 2018 at 15:35
writer: Online Reporters
The baht will test its seven-month low this week as foreigners continue to move out of the currency on higher interest rates and an improved economic outlook in the United States.
The baht continued to slide, ending last Friday at 32.91 to the dollar, a drop of 1.73% from a week before, according to the Bank of Thailand.
The Kasikorn Research Center said the currency was approaching its seven-month low of 33 against the greenback and could reach that point this week.
It predicted the baht would stay in the range of 32.80-33.40 to the dollar during the coming week.
The baht's depreciation was due to continued foreign outflows from Thai stocks and bonds after the US Federal Reserve raised the benchmark lending rate and amid worries about trade wars between the US and its trading partners.
The US central bank increased the Fed funds rate on June 13 to a range of 1.75%-2.0% and signalled more hikes before the end of the year.
Last week, foreign investors were net sellers of 13.8 billion baht from the Stock Exchange of Thailand. They have moved 176 billion baht out of Thai stocks since the beginning of the year.
US economic data to be released this week, including first-quarter gross domestic product, could apply additional pressure on the baht, the research arm of Kasikornbank said.
The US will announce its GDP figures on Thursday.