Tighter Virus Curbs, Renewed Protests Weigh On Baht

Spot USD/THB keeps pushing higher, with today's upswing likely driven by Friday's bid in the USD as well as local factors. These include the decision to step up Covid-19 containment measures form Tuesday, as well as renewed political unrest manifested in protests against PM Prayuth held over the weekend.

• Tighter restrictions implemented recently failed to contain the virus, which prompted the authorities to propose even stricter Covid-19 rules through Aug 2 and expand them to three new provinces (Chon Buri, Chachoengsao and Ayutthaya). Stricter curbs in the Greater Bangkok Area and elsewhere are expected to take effect on Tuesday, with business leaders calling for a fresh round of relief measures.
• In addition, the gov't implemented a strict ban on social gatherings last Friday. This did not stop thousands of protesters, who marched in the capital over the weekend, demanding the resignation of PM Prayuth and diverting funding for the royal family and the military to the management of Covid-19 outbreak. The demonstrators clashed with the police, who used tear gas and water cannons to disperse them.
• Looking ahead, the Customs Dept will release its monthly trade data this coming Wednesday. Any updates on the local Covid-19 outbreak will also provide interest.
• The rate last sits +0.113 at THB32.863, with bulls looking for a rally towards Apr 2, 2020 high of THB33.177, a key near-term resistance. Bears look to a pullback under Jul 13 low of THB32.540, which would bring Jul 6 low of THB32.067 into play.