PATTAYA, Thailand – The Thai baht weakened on May 12 in line with most Asian currencies, pressured by ongoing tensions in the Middle East, rising oil prices, and continued foreign capital outflows from Thailand’s bond market.
According to Kasikorn Research Center, the baht closed at 32.40 per U.S. dollar, weakening from the previous offshore market close of 32.27 baht per dollar.
Analysts said concerns over prolonged instability in the Middle East continued supporting higher global oil prices, increasing pressure on Asian currencies including the baht.
Additional downward pressure also came from foreign investors continuing to reduce holdings in Thai bonds.
Despite weakness in the currency market, foreign investors were net buyers of Thai equities by 1.753 billion baht during the trading session. However, they remained net sellers of Thai bonds worth 3.63 billion baht.
The U.S. dollar also maintained gains ahead of the release of the latest U.S. Consumer Price Index (CPI) inflation data, which investors are closely monitoring for signals on future Federal Reserve policy direction.
Kasikorn Research Center expects the baht to trade within a range of 32.20 to 32.60 against the dollar on May 13.
Key factors being watched include developments in the Middle East, foreign fund flows, and upcoming U.S. Producer Price Index (PPI) inflation figures for April.
