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THB: USD/THB Rebounds As BoT Warns On Baht Gains, TWI Very Strong

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USD/THB is tracking at 32.35/40 in latest dealings, close to 0.65% weaker in baht terms. Earlier highs in the pair were near 32.51. This comes after the pair closed at 32.173 yesterday and had rallied against the USD in each of the past 9 sessions. Some catch up following the firmer USD backdrop through US trade, as Fed Chair Powell sounded less dovish, is likely weighing on baht sentiment. 

  • We also heard from the BoT on Monday, which stated that the stronger baht is hurting exporters and tourism spending (see this link). This comes amid further reports that the local government will push the BoT to ease policy to support the economy. Earlier we had the Sep PMI ease to 50.4 from 52.0 (per S&P).
  • Yesterday's August trade data showed export growth at 11.4%y/y, from 15.3% prior, but the trend has been positive through 2024. The trade balance and current account both rose versus the July outcomes.
  • The pair is still some distance from its 20-day EMA (near 33.20), which is a resistance point we have been under since late July.
  • Still, given the degree of THB's outperformance in recent months, the authorities may keen to temper such trends. The chart below is the Goldman Sachs THB TWI, which isn't too far from pre Covid levels.
  • Offshore inflows momentum into local equities and bonds also cooled somewhat in the final week of September.
  • Looking ahead, we have CPI out next Monday in terms of the next major local data event. 

Fig 1: THB Trade Weighted Index - Goldman Sachs 

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USD/THB is tracking at 32.35/40 in latest dealings, close to 0.65% weaker in baht terms. Earlier highs in the pair were near 32.51. This comes after the pair closed at 32.173 yesterday and had rallied against the USD in each of the past 9 sessions. Some catch up following the firmer USD backdrop through US trade, as Fed Chair Powell sounded less dovish, is likely weighing on baht sentiment. 

  • We also heard from the BoT on Monday, which stated that the stronger baht is hurting exporters and tourism spending (see this link). This comes amid further reports that the local government will push the BoT to ease policy to support the economy. Earlier we had the Sep PMI ease to 50.4 from 52.0 (per S&P).
  • Yesterday's August trade data showed export growth at 11.4%y/y, from 15.3% prior, but the trend has been positive through 2024. The trade balance and current account both rose versus the July outcomes.
  • The pair is still some distance from its 20-day EMA (near 33.20), which is a resistance point we have been under since late July.
  • Still, given the degree of THB's outperformance in recent months, the authorities may keen to temper such trends. The chart below is the Goldman Sachs THB TWI, which isn't too far from pre Covid levels.
  • Offshore inflows momentum into local equities and bonds also cooled somewhat in the final week of September.
  • Looking ahead, we have CPI out next Monday in terms of the next major local data event. 

Fig 1: THB Trade Weighted Index - Goldman Sachs 

Keep reading...Show less