Baht at six-year high against the dollar
In line with other Asian currencies, the baht rose yesterday to a fresh, six-year high of Bt37.50 against the dollar, due mainly to a weakening greenback as well as pressure from the G-7 group of countries wanting the Chinese yuan to appreciate further.
The baht opened at Bt37.51-Bt37.56 per dollar yesterday before hitting its peak during intra-day trading at Bt37.50, a level unseen since January 2000. The currency closed at Bt37.60-Bt37.62, having strengthened around 8 per cent from the end of last year when it was at Bt41 per dollar.
A currency dealer at Bangkok Bank said yesterday that the baht had been increasing in line with regional currencies against the greenback, which had weakened due to concern over unsatisfactory economic indicators.
Phatraradee Chingulgitnivat, a dealer at Kasikornbank, said yesterday that despite the fresh six-year high, the baht had not strengthened as much as other Asian currencies.
She said the Singaporean dollar was at S$1.586 per dollar, an eight-year high, while the Japanese yen was at 114.25 yen per dollar, 2-per-cent stronger than the day before and the highest level in three months. The Indonesian rupiah was at 8,790 per dollar, also the highest in more than three months.
Phatraradee said the appreciation of Asian currencies was due to pressure from the G-7 group of countries that would like to see yuan appreciate more. In addition, dealers expect that the US Federal Reserve is likely to slowdown its tight monetary policy and consequently make the dollar depreciate further. Thus, the Asian currencies as well as the euro will become stronger.
"The support level of the baht is at Bt37.28 per dollar, which is quite strong. If the baht gets stronger than that, it could then test Bt36. But I think the baht is unlikely to break Bt37.28 within one or two weeks," Phatraradee said.
Another dealer from United Overseas Bank (Thai) said that the Bank of Thailand might have intervened in the baht.