Baht Loses Ground Despite Continued Equity Inflows, Political Risk Takes Focus

Spot USD/THB trades +0.043 at THB36.148, shrugging off overnight greenback sales. The next firm layer of resistance is at THB36.945, which capped gains on Jul 21. On the flip side, bears look for a retreat through the 50-DMA (THB35.808) and towards Aug 11 low of THB35.160.

• Foreign investors bought a net $133.0mn in Thai stocks on Tuesday, marking the 13th consecutive day of net inflows. The SET index turned bid yesterday, snapping a three-day losing streak.
• PM Prayuth survived a key test as the lower house of parliament passed a THB3.19tn FY2023 budget bill by thin majority. The spending plan is expected to get the approval of the Senate within 20 days.
• According to the Bangkok Post, the Constitutional Court may decide today whether to accept a petition of the opposition bloc seeking a ruling on when Prayuth's term should end. Dep PM Wissanu said that if the Court suspends Prayuth until the issue is resolved, Dep PM Prawit will serve as acting PM.
• The minutes from the BoT's most recent monetary policy meeting provided few, if any, surprises. The MPC judged that gradual policy normalisation will be consistent with sustainable growth, even as one member called for faster tightening.
• Customs trade data will grab attention on the data front going forward. There is no fixed time of the release, but it should happen in the coming days.