Krungthai Bank market strategist Poon Panichpibool yesterday reported that the Thai baht is likely to hover between 32.80 and 32.95 as foreign investment continues to leave the Kingdom.
He said foreign investors decided to sell their assets in Thailand due to the uncertainty caused by the Covid-19 situation in the country. He too would lead to a gradual weakening of the baht.
Meanwhile, the weaker baht will lead importers to exchange Thai currency for dollars or other foreign currencies. The baht would tend to weaken, or stabilize at 32.70 per US dollar.
However, Poon predicted that the Bank of Thailand would sell dollars or other foreign currencies in order to ease the fluctuation of the baht or delay its weakening.
Poon added that the dollar would strengthen amid concerns from market participants about the Covid-19 situation around the world, which has increased demand for safe-haven assets. Moreover, this strengthening is another factor in the weakening of the baht, he added.
Meanwhile, Asian stocks extended their losses on Tuesday after another difficult day for global markets as the rapidly spreading variant of Covid Delta fuels concerns about the expected economic recovery.
Investors have been shaken in recent weeks by data showing the highly transmissible virus is raging around the world, forcing some governments to reimpose containment measures.
Even countries with high vaccination rates have seen a sharp increase in the number of new cases, although observers point out that hospitalizations and deaths are reduced thanks to jabs.
The sell-off was also blamed on other factors, including lingering concerns about a possible tightening of central bank policy as the economy recovers, profit-taking with markets hovering around record or multi-year highs. , and investors jostling at the start of the corporate earnings season.
The concern of the trading rooms was reflected in the demand for safe-haven assets, notably US Treasuries, the yen and gold. Bitcoin fell to $ 29,516 and below $ 30,000 for the first time in a month, after hitting a record high of nearly $ 65,000 in April.