US-Japan move to stop yen slide helps baht appreciate
A US-Japan joint intervention to stop the yen's slide is among the reasons the baht has appreciated beyond 33 baht to the dollar, economists say, noting that the Thai currency is likely to continue gaining against the greenback in the near term.
The Thai baht has appreciated beyond 33 baht to the dollar, according to economists, due to a US-Japan joint intervention aimed at preventing the yen from sliding. This move comes after a month of weaker-than-expected US employment data, which eased concerns about a potential Federal Reserve interest rate hike in September. As a result, investors have reassessed their expectations and redirected funds from US assets back into emerging markets, bolstering currencies such as the baht.
K-Research reported that the baht traded within a range of 32.99-33.01 to the dollar early yesterday, compared to Friday's close of 33.05, marking a six-week high of 32.87 to the greenback. The Thai currency's recent gains are also attributed to the easing of tensions in the Middle East and the US-Iran negotiations, which could lead to a potential deal to facilitate passage through the Strait of Hormuz.
The yen has rebounded to 158.52 per dollar, up from a multi-decade low of 164 late last month, thanks to the US-Japan intervention. However, concerns have been raised about the effectiveness of currency intervention alone, as underlying economic and monetary policy factors may still negatively impact the yen. If Japan responds to the yen's weakness by selling US Treasuries and causing US yields to rise, it could directly affect the US financial system and economy.
Written by urgent.news from Bangkok Post Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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