The baht could slide further, touching 36 to the dollar if US economic data released later this week indicates a resilient US economy and further delays to the Federal Reserve's trim of interest rates, says Kasikorn Research Center (K-Research).
Weaker results than expected for the Thai economy have prompted continued capital outflows, noted the think tank.
The Thai currency traded at 35.76-78 against the greenback on Thursday morning, sliding from Wednesday's close of 35.68 after the US Manufacturing and Services Purchasing Managers' Indices for January posted the highest levels in 15 months and seven months, respectively.
The baht fell to a two-month low of 35.88 to the dollar during trade on Wednesday.
"Signs of resilient manufacturing and service sectors in the US support the probability that the Fed will keep the rate at high levels for longer as inflation is still higher than the central bank's target," said Kanjana Chockpisansin, head of research at K-Research.
The think tank projects the US central bank will start cutting the rate in the second quarter this year at the soonest, she said.
Meanwhile, the outlook for the Thai economy remains fragile and lacks fundamental factors to drive growth, said Ms Kanjana.
As of Jan 24, fund outflows from the Thai stock market totalled 23.9 billion baht year-to-date, while foreign investors sold 5.9 billion baht worth of Thai bonds, she said.
"If US GDP and inflation figures due this week are strong, the baht could possibly fall to below 36 to the dollar," Ms Kanjana told the Bangkok Post.
SCB Financial Markets said the baht has been supported by a stronger yuan as Beijing ramps up stimulus measures, with the People's Bank of China preparing to cut the reserve requirement ratio (RRR) for commercial banks.
The agency estimates the baht will move in a range of 35.65-90.
Ms Kanjana, however, believes the US factors will have a more profound impact on the baht's movement.
"The RRR measure is something the market has expected for some time. The Chinese government has clearly stated it will do so as the economy needs a boost," she said.
"Once the Chinese economy shows clear signs of a recovery, then the yuan and other currencies in the region should strengthen."