Baht poised for fifth monthly decline
- Published: 30/08/2013 at 12:16 PM
- Online news:
Thailand’s baht was poised for its fifth monthly decline, the longest losing streak in five years, after foreigners cut holdings of the nation’s assets as the US Federal Reserve prepares to reduce stimulus. Bonds dropped.
The baht touched a three-year low this week as data showed exports fell for a third month in July and manufacturing production dropped. Global funds pulled $2.7 billion from Thai bonds and stocks in August, official data show. The currency gained today as the prospect of an imminent US strike against Syria diminished, reducing the chance that oil supplies will be disrupted.
“Export numbers are still disappointing for Thailand, keeping underlying sentiment for the currency weak for a while,” said Nalin Chutchotitham, a Bangkok-based analyst at Kasikornbank Plc.
The baht lost 2.6 percent this month to 32.1 per dollar as of 9.31am. in Bangkok, according to data compiled by Bloomberg. The currency rose 0.3 percent today, paring its weekly decline to 0.8 percent. It has lost 8.8 percent since the end of March and touched 32.31 on Aug 28, the weakest since Aug 2, 2010.
One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose 90 basis points this month to 7.18 percent. It declined six basis points, or 0.06 percentage point, today.
U.K. Prime Minister David Cameron failed to gain parliamentary backing for military action against Syria yesterday. The Fed will begin to slow bond purchases at its Sept. 17-18 meeting, according to 65 percent of economists surveyed by Bloomberg.
Thailand will post a current-account deficit of US$475 million in July, after a shortfall of $664 million the previous month, according to the median estimate of economists in a Bloomberg survey before data due today. Exports fell 1.5 percent last month and manufacturing production dropped 4.5 percent.
The yield on the 3.625 percent sovereign bonds due June 2023 climbed 36 basis points in August to 4.34 percent, data compiled by Bloomberg show. The yield rose 16 basis points this week and fell four basis points today. It reached 4.39 percent on Aug 28, the highest level for a benchmark 10-year security since November 2009.
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Writer: Bloomberg News