BENGALURU: The Thai baht extended gains against the US dollar on Monday, hovering near a more than four-year high and complicating the central bank’s efforts to rein in the currency.
Asian stocks were largely higher on the day, with South Korea’s KOSPI closing more than 2 percent up and Taiwan’s benchmark index gaining 1.6 percent, lifting the MSCI EM Asia index to a one-week high.
Singapore’s FTSE Straits Times touched a record high, on track to end above 4,600 for the first time. Philippine stocks jumped more than 2 percent and Thai shares rose 1.1 percent to a one-week high.
Trading volumes thinned across most equity markets as holiday caution kept investors on the sidelines, leaving markets prone to exaggerated swings.
The baht appreciated around 1 percent in its steepest one-day rise since early September, reaching 31.133 per dollar, a level last seen in mid-June 2021.
That was largely driven by a surge in gold prices, adding to the Thai central bank’s challenge in curbing a currency that has already gained 10 percent against the dollar, threatening exports and tourism.
“THB’s sharp appreciation today is expected to be driven, primarily by fund flows from gold trading companies following a strong rise in gold prices,” said Ratasak Piriyanont, senior vice-president, investment strategy at Bangkok-based Kasikorn Securities.
“THB may continue to strengthen in the short term potentially into 1H26…it could shift toward depreciation from mid-2026 onward, in line with longer-term drivers, most notably interest rate differentials.”
Elsewhere, the Indonesian rupiah and the Philippine peso each slipped marginally, with the former lingering at a two-month low.
Malaysia’s ringgit and stocks traded largely flat. Data showed November inflation came in slightly below market estimates.
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