Baht Weakens, But Comfortably Remains Best Performer Month To Date Within Asia FX

USD/THB is up 0.60%, last near 34.35, leaving the baht the weakest performer within Asia FX so far today. Some of this is catch up after yesterday's spot close at 34.135, with the dollar, particularly against the JPY, firmer post the local close. Recent highs in the pair come in the 34.40/34.60 range, while on the downside, 34.00 still holds.

• Still, the baht comfortably remains the best performer within Asia FX March to date (~3.00%, PHP next best at +1.66%).
• Yesterday's hawkish +25bps BoT hike (with more potentially to come), has likely helped at the margins. Outright 2yr government bond yield differentials remain firmly in the USD's favor, although we are well off early 2023 highs (+325bps, versus +235bps currently).
• Additionally, some analysts have noted inflows into local bonds as a positive, which have presumably been driven by views the BoT is getting towards the end of the tightening cycle. Net flows have been +$739.4mn, largely offsetting equity outflows of -821.2mn month to date.
• Tourism remains key for the baht. For the period Jan 1 to March 27, the country saw 6.15mln visitors, slightly above the government's 6mln target. Annualizing this rate for 2023 leaves us at the bottom end of the 25-30mil forecast, but no doubt the authorities are hopeful for a further pick up in arrivals as we progress through the year.