Thai baht may further strengthen this week

BANGKOK: -- The Thai baht may continue rallying against the US dollar this week after rising to a six-and-a-half-year high of Bt37.28 late last week, according to a report issued by the KASIKORN Research Center (KRC).

The Thai currency may pass through a long-standing psychologicl barrier of Bt37.00 a US dollar this week.

Last week the Thai baht stayed at Bt37.43 a US dollar on average, compared with Bt37.85 on average the week before.

A key factor behind the sharp rise of the baht last week was a decision by the US Federal Reserve not to hike its interest rate, the first time in more than two years.

Also, remarks by Bank of Thailand (BOT) Governor M.R. Pridiyathorn Devakula on capital inflows and the central bank's mapping out measures to cope with the situation make currency traders believe that the Thai baht may continue to strengthen this week.

This week, the Thai currency is anticipated to move within the range of Bt37.00-37.60 a US dollar as traders are monitoring several key US economic reports, including the inflation rate and industrial production in July, according to the KRC report.

However, the expected strengthening of the Thai baht may be limited due to worries over a possible intervention of the BOT, especially if the Thai currency moves near the strong psychological level at Bt37.00 a US dollar, the report added.

--TNA 2006-08-13

I do understand that a weaker baht will help make Thai exports more competitive so exporters alway put pressure on the powers that be to keep the baht weak....but...on the other hand....since oil must be paid for in dollar equivalents a weak baht makes imported oil more expensive. The stronger baht is helping to reduce the outflow of Thai baht used to pay for oil imports.

On the other hand I have no idea if the value of the baht is being consciously controlled....or even if it is possible for it to be controlled for any length of time.

Edited August 13, 200619 yr by chownah

Hey Chownah, you've got three hands!