Baht Turns Bid Ahead Of CPI Data

Spot USD/THB dropped as onshore trading re-opened and the impact of overnight greenback sales kicked in. The pair last deals -0.283 at THB35.747, printing fresh one-month lows, as participants await the release of monthly inflation data.

• The next downside target is provided by the 50-DMA, which intersects at THB35.485 and has remained intact since early March. Bulls look for a rebound towards Jul 21 cycle high of THB36.945.
• The latest set of Thailand's CPI data will be published today, with headline price growth expected to have quickened to +8.00% Y/Y in July from +7.66% prior. A beat would cement the case for a rate hike next week, the first one since late 2018. Almost all economists surveyed by Bloomberg already expect a 25bp rate rise, with the sole dissenter calling for a 50bp move.
• Meanwhile, PM Prayuth has asked the public to be patient as the government is working to curb the rising cost of living. Just as elsewhere, inflation has become a politically salient issue in Thailand, with potential to weigh on support for the ruling Palang Pracharat Party (PPRP). The PPRP is already lagging behind the main opposition Pheu Thai Party in opinion polls.