THB Underperformance Continues, Authorities Concerned About FX Vol

The early tone to USD/THB has been to firm, although we remain below Wednesday highs. The pair was last in the 35.75/80 range, against yesterday's high of 35.88, which was the highest print for the pair since mid-November last year.

• The simple 50-day MA is nearby, around 35.60, while all key EMAs remain clustered between 35.20/30.
• Fresh baht weakness is a little out of line with a steadier USD trend in recent sessions. Baht is the weakest EM Asia currency YTD, down a little over 4.6%. Likewise in terms of US-TH 2yr yield differentials.
• Headlines crossed earlier from the Deputy Thailand Finance Minister Julapun, stating the authorities are concerned about THB volatility, while also stating that he hopes interest rates are cut soon to boost the economy. The government is doing all it can to boost the economy. This was from a BBG interview on Wednesday (see this link).
• Baht 1 month implied volatility has actually been coming down in recent weeks, last under 9%, after peaking above 10.5% at the start of the year.
• Local equities have bounced off recent lows, but offshore investors remain net sellers in the space. -$185.3mn so far this week and -$673.2mn in January to date.