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Political Uncertainty Keeps Baht Vulnerable

THB

Spot USD/THB closed at 35.385, up 300 pips on the day, after breaking above resistance from Jul 7 high of 35.292. Bulls set their sights on Jun 30 high of 35.713, the next key level above.

  • The Move Forward Party (MFP) ruled out supporting Pheu Thai Party's (PTP) Prime Minister candidate Srettha Thavisin in the upcoming vote. This is seen as a disadvantage for the PTP in its coalition talks with conservative parties, as Srettha will now need to secure more support from pro-military, royalist lawmakers. For the PTP, a closer alignment with their former adversaries from the conservative establishment may entail heavier reputational costs.
  • Continued political uncertainty keeps the Thai baht under pressure. The currency was the worst performer in emerging Asia overnight, with the regional space weighed on by weak Chinese activity data.

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