USD/THB Breaks 200-day EMA Support Level, Cross Asset Trends Helping Baht Sentiment

USD/THB has gapped lower, back to mid May levels in early Wednesday dealing. We were last at 35.95, around 0.45% firmer in THB terms. This puts us sub the 200-day EMA for the first time since March, although that breach of the support point proved to be very brief. The pair troughed around 35.365 at that juncture, while mid May lows were at 35.845, a potential near term downside target.

• Baht continues its recent outperformance trend, up 2.4% so far in July, (IDR is the next best in the region at +1.4%). YTD losses have been trimmed to 5%.
• Part of today's move will reflect catch up to softer USD trends post yesterday's onshore close. Broader cross asset swings have also been in THB's favor. US-TH 2yr yield spreads, are back at early Feb levels, +211bps. Down some 30bps since the start of the month.
• The gold price has also risen to fresh record highs, which may encourage more onshore selling/exports of the precious metal. Other commodities in the energy space, have been softer though, a THB positive at the margins.
• The local data calendar remains quiet, although this morning local time we get a briefing from the Federation of Thai Industries on industry sentiment. Next week we get trade figures.