In March, the USD/THB renewed its yearly high and remained stable thereafter. In April, the pair is forecast to continue approaching its high, according to economists at Mizuho Bank.
The USD/THB pair is likely to be on an uptrend
“If US interest rates continue rising further, making it likely for US monetary authorities to normalize monetary policy and weakening the stock market, capital inflow would accelerate further from emerging countries to the US. Thus, the current trend of USD appreciation is forecast to continue in the coming month.”
“In terms of domestic factors in Thailand, some Covid headlines have been positive, such that people entering the country in April and beyond will only need to undergo a 10-day quarantine instead of 14 days, while vaccinated foreign nationals will be exempt from any quarantine in some regions. However, real money transactions will only be reflected in the Thai baht exchange market in the summer. Thai baht-buying is therefore likely to be limited in April.”
“The USD/THB market is currently more correlated to the CNY market rather than domestic factors in Thailand. In the USD/CNY, capital inflow into the US is likely to accelerate from China, where the number of covid cases has been low, as it is seen that the US is about to recover from the COVID-19 crisis. USD/CNY could therefore rise in the times ahead.”
“In April, the USD/THB pair could reach 31.75 – the monthly high in September last year – toward approaching the 32 level, which is a psychological turning point.”