The Thai baht continues to weaken against the U.S. dollar, declining to 34.47/$US on Tuesday from 34.44/$US on Monday, in line with other currencies in the region, as expectations mounted that U.S. interest rates would stay higher for longer and as the debt ceiling standoff kept risk sentiment fragile.
Bank of Ayudhya analysts indicated that political uncertainty is a domestic factor that contributes to the baht’s depreciation as international investors await clarity on the formation of the government and the economic plans. Uncertainty has caused daily outflows of about THB10 billion from foreign investors.
According to data compiled by Bloomberg, investors pulled off US$513 million from the bond market last week, which was the first week coming out of the election day on Sunday. Local equities market also saw US$312 million of outflow as well.
As for the movement of the baht today, it is expected to be at 34.30-34.60/$US.
