BANGKOK: Thailand’s baht pares gains after a lower-than-expected ri
BANGKOK: Thailand’s baht pares gains after a lower-than-expected rise in inflation, while other Asian currencies trade cautiously ahead of United States and China inflation data due later this week.
The baht was up 0.27% earlier but pared gains to nearly 0.1%, while equities in Bangkok fell 0.2%, as the headline consumer price index came in below the central bank’s target of 1% to 3% for a third successive month.
The inflation data comes against the backdrop of growing political uncertainty in South-East Asia’s second-largest economy since the May 14 election, with the country’s former prime minister Thaksin Shinawatra postponing his return from self-exile as the region struggles to overcome a political deadlock. “Thai inflation in July dampened hawkish hopes that the Bank of Thailand (BoT) may effect one more encore hike this year,” said Kittika Boonsrang, a capital markets business research specialist at Kasikornbank.
“At the same time, it may cause some weakness in the Thai baht via speculative flows as the BoT seems to reach its peak rate in this cycle.”
Meanwhile, economic growth in Indonesia, in the second quarter, accelerated unexpectedly and came in above market predictions. The Indonesian rupiah was slightly weaker before the data, while stocks were up 0.4%.
Among other currencies in the region, the Malaysian ringgit and Philippine peso appreciating 0.02% each, while the Singapore dollar depreciated slightly.
Investors are eyeing US and Chinese inflation figures due later this week, with hopes of more policy easing to aid a weak post-pandemic recovery in China.
The Chinese yuan weakened 0.3% and is among the worst performing currencies in the region this year.
“Markets continue to wait for more stimulus measures to be announced by the Chinese authorities,” said Khoon Goh, head of Asia research at ANZ
“There is huge expectations of more policy support to be announced. Any lacking in that regard, I think, could risk some pullback in risk sentiment in the region.” — Reuters
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