Baht Recovery Extends, Best Performer in EM Asia Month To Date

The baht continues to outperform, rising a further 0.50% in the first part of trade. This puts the pair back into the 36.20/25 region, which is near late September levels. We are 100pips off early October highs. Baht is now the best performer in EM Asia FX for the month to date (0.52%, with KRW close behind).

• We are comfortably below the 20-day EMA (36.44), with the 50-day back at 35.89 and potentially the next downside target.
• Outside of the broader USD pull back, the baht is benefiting from local equities on a firmer footing. The local index rose 1.50% yesterday, while offshore investors bought $80mn of local shares, bringing week to date flows to +$125.5mn. If maintained this would be the strongest pace of inflows since May this year.
• It would also end a run of weekly outflows through all of September and in the first part of October.
• Lower oil prices are probably the other positive. WTI has given up all of its gains for the week in latest dealings. US intelligence hasn't found evidence that Iran directed Hamas to launch the weekend attack into Israel.