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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
THB
USD/THB hit fresh lows close to 33.30 in early trade, but we are slightly higher now, back above 33.45. Current levels are still slightly firmer for the session, while the baht comfortably remains the best performer within EM Asia FX to date in 2023, up nearly 3.5%, with KRW the next best (+2.15%), slightly outperforming CNH.
- From the highs in late October around 38.50 in USD/THB, downside momentum in the pair in recent months has been very strong. The rolling 2-month rate of change in THB versus the USD, is beyond 11%, see the chart below.
- We have to go back to the late 1990s and post the Asia financial crisis to see a stronger rate of change over such a timeframe.
- The baht remains a favored play on the China re-opening theme, with the authorities yesterday walking back a requirement that arrivals need to show vaccine proof. The authorities expect 7-10million Chinese arrivals by air this year, although only modest arrivals are expected in Q1 (~300k). Thailand (along with China), is one of the few EM Asia economies where growth is forecast to be stronger in 2023 relative to 2022.
- How arrival trends unfold will likely be watched closely by the market, as will broader USD sentiment. BoT/domestic rhetoric around FX trends will also be monitored. Today the Shippers' council has stated the strong baht will hurt export growth.
- Whilst the baht recovery has been very strong, spot USD/THB levels are still comfortably above 2022 lows near 32.00, while the THB NEER is through 2022 highs, but remains close to 6% away from early 2020 levels.
- The 20-day EMA sits back at 34.45, while any moves back towards 34.00 may also draw selling interest.
Fig 1: Rolling 2-month THB/USD Spot Changes
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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