Thai baht at highest point against dollar in 38 months

THE Thai currency opened at 32.32 baht to the dollar this morning (Jan. 4) with this being its strongest level in 38 months, or 3 years and 2 months, the Thai-language daily Matichon reported.

The Thai baht’s continuous rise against the greenback is due to inflow of investment funds.

Meanwhile the Thai stock market opened at 1,789.24 points, up 10.71 points or 0.60% from the previous day’s close at 1,778.53 points. This is the highest level it has ever reached since Thai bourse was launched in 1974.

However by 10.18 am it dropped to 1,781.91 points, still up 3.38 points or 0.19%, with trading value being 19,063.23 million baht.

At the sametime a Reuters report published by CNBC said the dollar extended gains this morning after upbeat US data and supportive minutes from the Federal’s Reserve’s latest policy meeting helped it shake off recent weakness.

The dollar was 0.2 percent higher at 112.710 yen in early Asian trading. It touched a 2-1/2-week low of 112.055 on Tuesday after declining steadily from a high above 113.750 scaled in December.

The euro was 0.05 percent lower at $1.2011 after losing roughly 0.4 percent overnight. The common currency had surged to a three-month high of $1.2081 on Tuesday.

The dollar bounced after Wednesday’s strong US manufacturing and construction data.

It gained further support as the minutes from the Fed’s Dec. 12-13 meeting were seen as more hawkish than anticipated, indicating the central bank is still poised to raise interest rates several times this year.

Fed policymakers acknowledged the US labor market’s solid gains and the expansion in economic activity, even as they affirmed policymakers’ worries about persistently low inflation.

That suggested the central bank will continue to pursue a gradual approach in raising rates but could pick up the pace if inflation accelerates.

“The dollar did feel downward pressure at the turn of the year, but the selling was not based on very strong factors,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

Rebalancing of positions caused by investors closing their books towards the turn of each year can lead to dollar selling.

“As such, strong US data and the Fed’s minutes, which suggested board members were not as pessimistic towards the potential economic impact of US tax cuts as many in the market expected, helped the dollar get back on course,” Yamamoto said.

Increasing investor risk appetite in broader markets also supported the dollar, notably against perceived safe-havens like the yen and Swiss franc, which was at 0.9776 franc per dollar after sliding 0.6 percent the previous day to pull back from a three-month peak of 0.9699.


Top: A graphic shows some Thai baht against a background of a stock digital board. Photo: Matichon