Baht Weakens Even As Officials Ramp Up FX Warnings

Spot USD/THB creeps higher ahead of the expected rate hike from the Fed, despite stepped up verbal interventions on baht weakness. The rate deals +0.078 at THB37.083 and if Sep 16 high of THB37.115 gives way, bulls will target Sep 19, 2006 high of THB37.951. Downside technical focus falls on THB36.283, the 50-DMA.

• Acting PM Prawit has ordered the Finance Ministry to closely monitor FX developments, help the BoT keep an eye on baht volatility and hold meetings to gather views from interested parties. FinMin Arkhom said later Tuesday that Ministry/BoT officials will meet to discuss FX matters amid the need to "seek balance" in the exchange rate. This comes after the central bank said last Friday it stood ready to take steps to curb excessive baht volatility.
• Meeting-dated OIS prices ~80bp of tightening at Wednesday's FOMC meeting. The move will widen the gap with the BoT, which was one of the last central banks in emerging Asia to join the tightening party. Thailand's policymakers will review policy on Sep 28 (USD/THB 1-Week implied vol sits near two-year highs).
• Foreign investors bought a net $13.7mn in Thai stocks Tuesday, but daily flows have been trending lower over the past month. The SET index ground higher, moving away from two-week lows.
• Thai Customs Dept will publish trade data tomorrow, with monthly shortfall expected to have shrunk to $3.044bn in Aug from $3.660bn registered in Jul.