USD/THB Back Sub 34.50, Thai Equities Rallying On Lower CPI

The baht is the best performer in the Asia FX today. USD/THB is down around 0.70%, with the pair sub 34.45. Thai markets were closed yesterday, so this may reflect some catch up, but the baht is outperforming broader currency trends in the region at the margin, i.e. relative to the ADXY, which has shown a steady trend this week in large part due to the USD/CNY rebound.

• On the downside the 20-day EMA isn't too far away at 34.40. We haven't been sub this support point since early Feb. The 50-day sits around 34.28 level. On the topside rests the 100 (34.68) and 200 (34.89) day EMAs.
• The rebound in Thai equities, +1% today, the first gain in 8 sessions is likely helping baht sentiment. Although as we noted last week, local equities have generally been lagging the stronger baht tone (so isn't necessarily a leading indicator for the currency). This may change if it leads to a better equity flow backdrop from offshore investors.
• Equities have been aided by the downside CPI miss. Headline fell -0.12% m/m, which left the y/y pace at 3.79%, versus 4.10% expected and 5.02% prior. Core slipped to 1.93% (2.00% forecast), which is back sub the mid point the BoT's target band.
• The authorities expect March inflation to be the same or softer, so this could open the door for a BoT pause at the March meeting.