USD/THB Back Sub 35.00 As Political Impasse Ends

USD/THB finished yesterday at 34.95, a baht gain of 0.64%. These levels are close to the 20-day EMA, which comes in at ~34.96. The 50-day sits further south at 34.80, the 100 and 200-days are near 34.70. Lows in the pair in July came in around 33.76, while recent highs rest at ~35.60.

• FX sentiment appeared buoyed by a seeming end to the political impasse, with Pheu Thai PM candidate Srettha Thavisin elected as the new PM. This comes after months of uncertainty after the May 14 election.
• The focus is now likely to shift to economic policies and make up of the new government. Recall earlier in the week we had weaker than expected Q2 GDP growth, with business investment momentum slowing noticeably. Sentiment readings have also moved lower for both consumers and businesses in recent months.
• Local equities spiked yesterday as well, the SET up 1.29%, although we are still below early August highs of ~1562 (yesterday's close was 1545.60).
• Offshore investors added $14.6mn to local equities yesterday, but August outflows remain at -$332.4mn, while YTD outflows are -$3.8bn. If we can see these trends turn more positive, it should aid a further THB recovery, although efforts to boost the local economy may take time, while a weaker China backdrop is also a risk to be mindful of.