USD/THB Back Below 33.00, But Remaining Above YTD Lows

USD/THB is back below 33.00, +0.5% for the session in baht terms and the best performer in EM Asia FX so far today. The pair touched 32.80 earlier, but we have edged back to 32.87 now. Baht bulls will be eyeing a break of Jan 16 lows close to 32.70, while on the topside, resistance is evident on moves up to the 33.10/33.20 region. The descending 20-day EMA comes in at 33.75.

• Baht is on track for a weekly gain, but a more modest +0.25%, which contrasts with the cumulative 4.3% gain seen in the first two weeks of the year.
• Some pockets of concern around the pace of baht appreciation have emerged onshore. The Shippers Council noting a potential loss of competitiveness (they forecast export growth of 1-3% this year).
• Consensus growth expectations are also steady at 3.7%, which is an improvement on 2022's likely outcome (3.2%), but hasn't been revised higher since China abandoned its CVS.
• An expected weaker global backdrop, less fiscal spending post the election and uncertainty around how strong the boost from China to the local tourism industry will be, are all factors highlighted by the sell-side.
• These factors will need to be monitored but the long baht them is still likely to remain favored in the near term. Offshore investors had added to local equities every session since Dec 27 (around $1.2bn net inflows over this period).
• Note the main event risk next week is BoT's decision on Wednesday, with a +25bps hike expected. BoT commentary around baht will also be monitored for any sign of concern around baht strength.