Baht Weakens Further Despite BoT Warning, Widening Trade Surplus

Spot USD/THB extends gains despite yesterday's warning from the BoT and above-forecast trade surplus reported by the Customs Dept (see comments below). The rate last deals +0.088 at THB34.303, with bulls looking for a break above May 24, 2017 high of THB34.485, followed by May 11, 2017 high of THB34.815. Bears look for a pullback under the THB34.000 mark.

• The BoT flashed a warning signal on baht depreciation Tuesday, noting that it was closely monitoring its moves and stood ready to take action if it sees unusual volatility. Its comments came after USD/THB crossed above THB34.000 for the first time since 2017.
• Thailand's exports and imports smashed forecasts in March, according to the latest figures from the Customs Dept. Trade surplus was expected to have flipped into a deficit of $100mn, but instead widened to $1.460bn. Commerce Minister Jurin Laksanawisit noted that baht weakness played a role in boosting shipments.
• On the fiscal front, Thai Cabinet approved THB8.3bn budget for a cash handout programme targeting elderly people, but decided to call quits on its fuel subsidy scheme, whereby diesel prices were capped at THB30/litre. PM Prayuth said that the Fuel Oil Fund used to keep a lid on diesel prices is severely depleted and the programme has become too costly.
• Thailand's Finance Ministry will hold a briefing on 2022 economic outlook today and may revise its current GDP forecast.
• Data highlights during the remainder of this week include industrial output (Thursday) and BoP balance (Friday).