Baht Extends Gains In Wake Of BoT MonPol Decision

Spot USD/THB has extended losses, even as the BBDXY index remained afloat, after the BoT raised its key interest rate by 25bp and said policy normalisation will continue as the economy recovers. The Thai baht now outperforms all of its peers in emerging Asia.

• When this is being typed, spot USD/THB trades -0.107 at THB34.180. Bears look for losses past support from Mar 20 low/50-DMA/50% retracement of the Jan 23 - Feb 28 rally located just shy of the round figure of THB34.000. Conversely, bulls keep an eye on Mar 22 high of THB34.558, followed by key resistance from Feb 28 high of THB35.388.
• The decision to deliver a 25bp rate hike was unanimous and expected by 19 out of 22 economists polled by Bloomberg, with the three dissenting analysts calling for a pause. The central bank flagged some upside risks to the inflation outlook from higher cost pass-through and demand pressures and said that it deemed gradual policy normalisation to be appropriate.