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Thai Baht Hits Three-Week High (USD/THB)

Published: 12 Sep at 5 PM Tags: Dollar, America, UK, USA, Canada, China, Mexico, Thailand,

With the US Dollar fluctuating in response to mixed views regarding the prospect of the Federal Reserve tapering stimulus when it meets next week, the Thai Baht was able to brush a three-week high against the ‘Greenback’.

This week the Baht has enjoyed its longest consecutive run of advances for over six months as the appeal of the emerging market asset was boosted by improving confidence in the global economic recovery.

Stronger-than-anticipated economic data from China, the US, UK and Canada has supported higher-risk currencies over the last few days, and holdings of Thai stocks have been increased by over $200 million since Tuesday.

China is Thailand’s largest export market, so news that export growth in the larger Asian nation advanced to 7.2 per cent last month was good news for the Thai economy and the Baht hit a high of 31.74 against the US Dollar.

However, some economists aren’t expecting this strength to last. According to one Tokyo-based industry expert; ‘Risk sentiment is improving and funds are flowing into the nation, supporting the Baht. But I see this as a temporary rally in a weak market environment.’

When the Federal Market Committee meets next week it is hoped that policy makers will put an end to months of speculation regarding the Federal Reserve tapering easing.

While it has been predicted that the Fed will indeed scale back stimulus, it is thought that the central bank will adopt a fairly dovish stance. If that proves to be the case the US Dollar could decline initially in a knee-jerk type reaction, but would likely go on to strengthen against emerging market peers like the Baht.

In other currency news, Mexico’s Peso dropped from a high of 13.1269 against its US counterpart as a surprising dip in US jobless claims added to the case for the Fed tapering quantitative easing. Although the decline in applications for unemployment benefit was largely the result of a computer systems error in two states, the result still shocked the market and triggered currency movement.
As of Thursday, 12th September 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP USD exchange rate was 1.5803, GBP CAD exchange rate was 1.6319, GBP CNY exchange rate was 9.6682, GBP MXN exchange rate was 20.6531, and GBP THB exchange rate was 50.1839.
Patrick James About Author: (289 Posts)Patrick completed his economics degree just as the global financial crisis struck in 2008. In the intervening years Patrick has made his mark, climbing to a prominent position within a large financial services provider. As part of his role Patrick uses his expertise to advise companies of the best ways to safeguard against currency risk.

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