The baht hit a near nine-month low on Tuesday, extending losses for a seventh straight session, as the US Federal Reserve's recent hawkish turn continued to weigh on the currency.
Equity markets across Asia tracked a global overnight rebound on Wall Street, as market participants turned their attention to economic growth.
The baht, which has come under pressure along with its regional peers after the Fed last week indicated earlier than expected policy tightening, dipped to its lowest since Sept 30, 2020.
"The baht's recent weakening is largely due to the US Fed's recent hawkish pivot, likely exacerbated by Thailand's already weak economic fundamentals due to the virus situation," said Dhiraj Nim, FX strategist at ANZ Research.
While strict entry requirements and quarantine measures initially helped keep coronavirus outbreaks under control, the curbs saw revenue from the key tourism sector plummet.
Investors are also awaiting a Bank of Thailand meeting on Wednesday, where the central bank is expected to keep its policy rate at a record low, but likely cut its economic growth outlook.
Several other currencies in the region benefitted from a weaker US dollar, however, as investors looked ahead to a testimony from Federal Reserve Chairman Jerome Powell.
"We are keeping a lookout for if Fed officials will attempt to reassure markets that the Fed is not about to start a tightening cycle pre-emptively," said Christopher Wong, senior FX strategist at Maybank.
"However if there is none...and instead more hawkish talk, then USD rise could weigh on AxJs (Asia except Japan)."
Indonesian stocks, which skidded 1.5% last week, snapped a four-day losing streak and jumped nearly 1.5% even as the country's total coronavirus cases passed the two million mark.
Stocks in the Philippines and South Korea rose 0.7% and 0.6%, respectively, while Thai shares eyed their best session in nearly two weeks.
Equities in Taiwan were on course to notch their best session in more than three weeks, a day after the island forecast strong demand for tech goods amid a sustained need for telecommuting products during worldwide lockdowns.