The baht is expected to rise to 35 to the US dollar next week as the greenback weakens after investors forecast an end to Federal Reserve rate hikes.
The baht opened at 35.23 to the dollar on Thursday, strengthening from Wednesday's close of 35.47.
Kobsidthi Silpachai, head of capital markets research at Kasikornbank, said the baht has been gaining this week, in line with a weakening dollar and declining 10-year US bond yield.
The Fed is expected to end its rate hikes for this cycle and start cutting rates next year, he said.
The market forecasts the Fed will begin to slash its policy rate in the second half of 2024, earlier than previously projected, said Mr Kobsidthi.
Two rate cuts are expected next year, he said.
The next Federal Open Market Committee meeting is scheduled for Dec 12-13 to determine the fed funds rate.
The Fed held steady on rates for the second meeting in a row earlier this month, keeping the target rate at 5.25% to 5.5%.
"Investors are continuing to sell US treasuries in preparation to close their investment accounts before Thanksgiving next week," said Mr Kobsidthi.
"We expect the baht to continue to appreciate and it could be below 35 to the dollar next week."
The National Economic and Social Development Council is scheduled to announce GDP growth for the third quarter on Monday, with the rate expected to grow on a quarter-on-quarter and a year-on-year basis.
For the second quarter this year, growth was lower than anticipated because of uncertainty surrounding the formation of a new government.
Improving economic growth in the third quarter would also support a stronger baht against the dollar, he said.
Poon Panichpibun, money market strategist at Krungthai Bank, said the bank predicts the baht to move in a range of 35.10-35.35 to the dollar.
The baht should not rise above 35 in the short term amid volatility in the money and capital markets, he said.
Any movement in the fed funds rate would be a key factor affecting the US dollar and the baht, said Mr Poon.
US bond yields remain volatile despite investors believing the Fed is done with rate hikes, noted the bank.
The market forecasts the Fed will cut its policy rate by one percentage point next year, he said.
If the Fed reduces its rate earlier than projected, it would ease the bond market's volatility and show clearer signs for the baht's appreciation, said Mr Poon.