Thai baht hits 19-month high against USD today

The Thai baht hit a 19-month high of 32.93 baht against the US dollar (USD) and is expected to fluctuate between 32.80 baht and 33.00 baht/USD today, according to Poon Panichpibool, a capital market strategist at Krungthai Global Markets.

He said that there is momentum for the Thai baht to strengthen further, before falling back if the USD rebounds and foreign investors start offloading their Thai stocks to take short-term profits.

Last week, president of the Federation of Thai Industries, Kriangkrai Thiennukul, called on the Bank of Thailand to prevent the Thai currency from strengthening too much against the US currency, as it would make Thai exports less competitive.

Businesses directly affected by the baht’s appreciation are those which have already exported goods from Thailand and are yet to receive payment from their overseas buyers, as well as those which are currently in negotiations, because the buyers are likely to ask for a price adjustment, which would mean lower profits for the Thai exporter.

The tourism sector would also be affected, as tourists would get fewer Thai baht when exchanging their currencies and this may persuade them to switch to other destinations.

The Thai Chamber of Commerce and seven export associations are due to hold a press conference today, to voice their concerns over the continued strengthening of the baht and the high interest rates which, they complain, are hurting Thai exports.