The Thai baht snapped a four-day losing streak on Wednesday, with dealers deciding the tumble to the lowest against the dollar since September the previous day was overdone and foreign investors tip-toed back into domestic shares. The baht was also supported after minutes of the Bank of Thailand's policy meeting earlier this month said the Monetary Policy Committee discussed a 50 basis point-interest rate increase.
It elected to raise rates by a quarter point eventually, but the minutes suggested authorities were ready to take stronger measures to keep inflation at bay. Still, currency investors remained concerned about rising prices in Thailand, India and Indonesia, analysts and dealers said.
"With inflation worries, foreigners will exit from the countries now and come back later," said a Kuala Lumpur-based trader. Standard Chartered took profits on its long dollar/baht recommendation, saying the 14-day RSI and stochastics were rolling into overbought territory.
Both the baht and the Indian rupee have fallen 2.2 percent so far this month, the worst performing currencies in emerging Asia Investors redeemed $299 million from Asia equity ETFs in the week ended January 21, the first outflow in nine weeks and the heaviest since September, data from TrimTabs Investment Research showed. Within Asia, Thailand, China, Hong Kong and India ETFs suffered the largest outflow in 2011, data showed.
Apart from the baht, the won rose for a third consecutive session on exporters' demand for the currency for settlements before the end of the month and the Lunar New Year. Dollar/won slid to as low as 1,115.8, the lowest since January 20. "Strong stocks forced investors to give up their long (dollar/won) positions," said a foreign bank dealer in Seoul.
Comments
Comments are closed for this article.