Baht Shows Weakness as Fund Managers Closes Position on Major Assets Classes

Easing of lockdown would add to the strength of the currency pair, which investors are closely monitoring

The Thai baht slipped by 0.1% trading at USD 32.45/THB this morning as the global fund managers sold out their positions in Thai equities and bonds. On a year-to-date basis foreigners net flow into equities stood at -84.92 million baht, according to index data. Whereas on a separate matrix as of September 6 foreigners sold out 3.38 million baht worth of bonds according to data stated by Thai BMA.

The Ministry of Health this morning announced the lowest COVID-19 infected cases in two months. However, investors are closely anticipating the government’s measure to reopen the country. The Stringency Index which tracks the intensity of the government’s lockdown measures went down to 55.09 adding market expectation on reopening of the country. The negative correlation between the stringency index and SET index is expected to benefit the broad market index. Earlier tourism minister indicated his grand plan to reopen the country in November for vaccinated travelers.

Strength added to the currency pair USD/THB on unexpected headline inflation number on September 6 tested resistance for a short period before reverting to upward movement. 

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