The baht appreciated to below 35 per US dollar, driven by a weakening greenback as the market expects a Federal Reserve rate cut following the release of recent US economic data.

On Wednesday the baht opened at 35.03 per dollar, strengthening from Tuesday's close of 35.16.

The local currency continued to gain, reaching 34.88 baht per dollar during morning trade, the highest level in seven months, surpassing the January range of 34.96-34.98 baht per dollar, said Kanjana Chockpisansin, head of research for banking and financial sectors at Kasikorn Research Center (K-Research).

Ms Kanjana said the baht strengthened not only against the dollar, but also against other major global currencies and regional peers.

She said this appreciation aligns with the dollar's decline following the US Producer Price Index (PPI) coming in lower than market expectations, reinforcing confidence in a potential Fed rate cut of more than 0.25 percentage points in September.

In addition, rising gold prices further supported the baht's strength against the dollar. The baht is expected to continue its upward trajectory, likely moving within a range of 34.80-35.50 baht per dollar this week, in line with the ongoing dollar depreciation, according to K-Research.

Poon Panitchpibun, a money market strategist at Krungthai Global Markets, said the baht appreciation was in line with declining US bond yields following the release of updated US economic data.

The weaker PPI is building investor confidence in Fed policy rate cuts of up to four times this year, said Mr Poon.

The dollar's decline against other global currencies and the drop in the US 10-year bond yield also contributed to rising gold prices, he said.

"The baht is expected to continue moving in a sideways-up trend this year, largely depending on US economic data and market expectations regarding Fed rate cuts," said Mr Poon.

"We anticipate the baht trading in a range of 34.85-35.50 per dollar."

 

 

Bangkok Post