USD/THB Sub 35.00, Fresh Multi Month Lows, BoT Expected To Hold Steady Tomorrow

USD/THB sits near 34.96 in recent dealings (+0.40% higher in THB terms). The majority of gains came not long after the open, as we broke down through 35.00. Lows were seen close to 34.90, levels we haven't been at since the start of Sep.

• Baht gains look to be broadly in line with USD weakness, although the currency has outperformed the rest of EM Asia FX in the past week (up nearly 0.80% over this period).
• As we noted yesterday, firmer gold prices will be aiding sentiment at the margin, as this could lead to higher exports. Yesterday's surprise trade deficit hasn't had a lasting negative impact on sentiment.
• BoT Governor Sethaput spoke on a panel session in Hong Kong earlier. He didn't give much away on monetary policy given the proximity of tomorrow's policy meeting (no change is expected).
• He did state Thailand inflation would have remained comfortably if it weren't for subsidies (0.9% rather than the most recent print of -0.31% y/y, BBG).
• One area of concern is that China tourists weren't coming back, with spending also down on prior outcomes the Governor noted. This is definitely something that is on the radar for the authorities, with steps being considered to boost inflows in 2024 (see this Bangkok Post article).