Baht Underpinned As Thailand Eases Restrictions, Even As M'fing PMI Deteriorates

Spot USD/THB has severed support from a trendline drawn off Dec 18 low, starting the week on a heavier note after Thailand relaxed some of its Covid-19 restrictions. The decision of Thailand's Covid-19 panel was announced by its spokesman last Friday, with most schools and businesses allowed to re-open. The panel, chaired by PM Prayuth, also dropped most provinces from its list of high-risk areas.

• The loosening of restrictions has overshadowed a deterioration in Thailand's Markit M'fing PMI, which suggested that the manufacturing sector has returned into contraction. Headline index printed at 49.0 in Jan vs. 50.8 recorded in Dec. IHS Markit commented that "output and new orders both fell back into decline, with demand undermined by growing concerns over a second wave of COVID-19 that has led to a tightening of restrictions worldwide."
• Thai Excise Dept said that the excise tax structure for electronic vehicles should be finalised this year, as the gov't seeks to promote Thailand as an EV hub.
• Spot USD/THB last trades at THB29.91, slightly shy of neutral levels. Continued slide through Jan 5 low of THB29.84 would shift focus to Dec 18 cycle low of THB29.76. Conversely, a rebound above the 50-DMA at THB30.09 would bring Jan 18 high of THB30.13 into play.
• Thailand's Centre for Covid-19 Situation Administration will hold a press briefing at 11:30 local time, while Dep PM Supattanapong will make an update on Eastern Economic Corridor Committee's meeting around the same time.
• Looking further afield, the BoT's business sentiment gauge comes out today, with the consumer confidence index due later this week. The latest CPI report will be published on Friday.
• Elsewhere, the BoT are set to deliver their MonPol decision on Wednesday, with 21 out of 24 analysts surveyed by BBG expecting no change to the main policy rate.