USD/THB Tracking Below 20-Day EMA, Local Equities To Multi-Month Highs

Baht is the strongest performer in the Asian FX space so far today. USD/THB is down 0.45% at this stage to 34.90/95 (after closing yesterday near 35.10). Support was evident on an earlier dip to 34.89. Ther 20-day EMA is at 35.02, although recent moves sub this support level haven't been sustained. Note as well, the 50-day EMA isn't too far away at 34.87.

• Baht has benefited from the softer dollar backdrop, with the BBDXY comfortably off recent highs and continuing to track lower today (last near 1235.30). The SET equity index is also tracking firmer (+0.50% yesterday) to fresh highs back to April.
• Relative yield spreads have also moved against the USD, as US yields as moved lower following recent data misses. Thailand yields are also firmer though, with HSBC revising higher its net bond supply forecast for the 2024 fiscal year, see this link. Projected fiscal handouts from the new government is driving wider fiscal deficit assumptions.
• New PM Srettha has stated the qualification/vetting process for the new cabinet should be completed by tomorrow.
• On the data front, we have July IP figures out in a little while. The market consensus is for a -4.0% y/y outcome (-5.24% was the prior result). Later on, July BoP/trade figures are due. The current account is expected to remain in surplus, while export and import remain negative in y/y terms.