Phuket Sandbox Kicks Off

Spot USD/THB last trades -0.042 at THB32.010, holding above the THB32.000 level breached this week for the first time in more than a year. A pullback under Jun 25 low of THB31.740 and the 50-DMA at THB31.380 would signal potential for a deeper reversal, while topside focus falls on the 76.4% retracement of the 2020 - 2021 slide at THB32.370.

• Thailand's Markit M'fing PMI improved to 49.5 in Jun from 47.8 prior, falling short of returning above the breakeven 50 level. IHS Markit noted that the latest wave of Covid-19 infections "kept Thailand's manufacturing sector in contraction for a second straight month as demand and production fell". On the positive side, analysts highlighted "the reduced pessimism seen in June while foreign demand remained in growth".
• The Phuket Sandbox opens today and the project will be closely watched as a potential template for broader relaunching tourism in Southeast Asia. PM Prayuth is visiting the island today to oversee its reopening.
• Head of Thailand's Covid-19 task force warned that the fourth wave of infections may be coming, amid the rapid spread of the highly infectious Delta variant. The number of fatalities from the disease rose by the most on record (57) today, while the increase in new cases (5,533) was largest since mid-May.
• The BoT will release its Business Sentiment Index today. Last month, the index printed at 43.0, the lowest point since July 2020.