Baht Extends Losses With All Eyes On Fed

Spot USD/THB has extended gains, playing catch-up with overnight greenback purchases, as pre-FOMC positioning dominates. The rate last deals +0.122 at THB34.952, hitting new four-year highs.

• From a technical standpoint, bulls need a clearance of the round figure of THB35.000 before taking aim at Mar 10, 2017 high of THB35.425. Meanwhile, losses past Jun 10 low of THB34.528 & Jun 6 low of THB34.300 would shift bearish focus to support area at THB34.048/34.018/34.000, which represents the cluster of May 30 low/May 5 low/round figure.
• Surprisingly hawkish comments from BoT Gov Sethaput yesterday, who said that "too slow a rate hike is not good" in an apparent departure from previously cautious stance on tightening, has failed to offset the impact of piling hawkish FOMC bets.
• FinMin Arkhom announced Monday that the Finance Ministry will soon propose to Cabinet to implement a 0.1% tax on stock transactions conducted on the Thai bourse, with the levy intended to take effect "at an appropriate time." The move is expected to generate tens of billions of baht in revenue.
• Elsewhere, PM Prayuth played down potential for a Cabinet reshuffle as one of his deputy ministers faces legal proceedings by the National Anti-Corruption Commission.
• The Premier chairs weekly Cabinet meeting today.