The baht has been exhibiting a greater degree of volatility against the US dollar than its regional peers, mainly due to market expectations of a US policy rate cut and Thailand's gold imports.
Year-to-date, the baht's rate of volatility stands at 7.3%, slightly below the Korean won at 7.4%.
However, the baht's volatility is higher than other regional currencies, with the Malaysian ringgit and Indonesian rupiah both recorded at 5.5%, the Philippine peso at 4.7%, the Taiwanese dollar at 4.1%, the Singapore dollar at 3.7% and the Vietnamese dong at 2.4%.
Meanwhile, the US Dollar Index recorded a volatility rate of 5.3%, according to Kasikorn Research (K-Research).
The US Dollar Index is a measure of the value of the US dollar relative to a basket of foreign currencies, often referred to as a basket of US trade partners' currencies.
The baht has been fluctuating significantly since Aug 30, moving between 33.45 and 33.78 baht per dollar, influenced by global gold prices. On Sept 6, the baht reached a 19-month high of 33.49 against the dollar.
On Monday, the baht opened at 33.63 per dollar, depreciating sharply from Friday's closing rate of 33.52 to the greenback.
This week, the baht is expected to move within a range of 33.30-34 baht.
Key factors to monitor include the new government's economic policies, foreign fund flows, global gold price movements and US economic data, according to Kanjana Chockpisansin, head of research for banking and the financial sector at K-Research.
Poon Panitchpibun, a money market strategist at Krungthai Global Markets, said the baht's significant depreciation is linked to movements in the dollar and gold prices based on US economic data.
In August, US non-farm payrolls increased by 142,000 positions, lower than the market expectation of 160,000, but employment rates improved in some segments.
Given this scenario, some investors revised their view, anticipating that the US Federal Reserve (Fed) would not cut its policy rate by 50 basis points, as previously expected, thereby supporting a stronger dollar compared to the baht.
Krungthai forecasts that the baht will move in a range of 33.40-34.10 per dollar this week.
Separately, TTB Analytics projects that the baht will continue to experience volatility, largely driven by the dollar in line with the Fed's policy rate direction and the upward trend in global gold prices.
The gold price surged 21% year-to-date (as of Sept 3), aligning more closely with the baht's movement than with other regional currencies.
Additionally, Thailand ranks among the top global gold trading nations, representing an average of 5% of global gold trading over the past five years.
Thailand's gold imports are also higher than those of other regional countries, reflecting the gold investment preferences of Thai investors, according to TTB Analytics.