Mon Sep 23 21:45:00 UTC 2024: ## Baht Soars to 19-Month High as US Dollar Weakens
**Bangkok, Thailand** – The Thai baht surged to a 19-month high against the US dollar on Monday, driven by a weakening US currency and profit-taking in gold. The baht opened at 32.92 per dollar, its highest level since December 2022, compared to Friday’s closing rate of 33.60 baht.
The appreciation of the baht follows the US Federal Reserve’s (Fed) sharp 50 basis point reduction in its policy rate last week aimed at curbing inflation. Analysts at Krungthai Global Markets predict further rate cuts from the Fed, bringing the policy rate to 4.25-4.5% by year-end.
Krungsri forecasts continued baht strength this week, trading within a range of 32.75-33.50 baht per dollar.
While the Fed’s rate cuts have significantly weakened the dollar, the Bank of Thailand’s Monetary Policy Committee (MPC) is expected to maintain its policy rate at 2.5% at its next meeting on October 16.
The baht’s appreciation was also attributed to profit-taking in gold after global gold prices reached record highs. Krungthai Global Markets expects gold prices to remain on an upward trend, and predicts the baht will continue to strengthen against the dollar this week, trading within a range of 32.60-33.30.
However, experts emphasize that the baht’s appreciation is manageable. The Thai government’s plan to issue bonds in foreign currencies next year is expected to help ease the strength of the baht.
While the Fed’s rate cuts may have minimal impact on the Thai economy, the weaker US dollar has undoubtedly impacted the baht. The Bank of Thailand will intervene in the currency market as needed to ensure the baht moves in line with other regional currencies.
Overall, the baht’s recent appreciation is attributed to a confluence of factors, including the Fed’s rate cuts, global gold prices, and increased fund flows to the region.
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