The Thai baht hit a near two-month high against the dollar on Wednesday, before the central bank's rate decision, and analysts say the currency may find further support if the Bank of Thailand convinces the market it remains hawkish on inflation.
The Bank of Thailand was spotted buying dollars to check the baht's strength, dealers said. The local currency has risen 1.8 percent against the dollar since the start of February. The baht strengthened to as firm as 30.24, the strongest since January 13, on demand from exporters and foreign banks.
The baht has room to rise more on equity-linked flows, said dealers in Bangkok, though the bank of Thailand will continue to intervene. The won hit its highest in more than two weeks on exporters' demand for settlements and offshore players such as model funds.
The won strengthened to as firm as 1,113.5, the strongest since February 21. Dollar demand linked to foreign investors' recent stock sales also put pressure on the won. The Philippine peso rebounded against the dollar after the gyrations seen late Tuesday's Asian session and in offshore markets. The one-month peso non-deliverable forward (NDF) , which traded as high as 43.60 in New York, was quoted at 43.43 as traders realise the central bank may have only been targeting the speculative activity associated with arbitrage transactions.
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