Bloomberg News

Thai Baht Heads for Fourth Weekly Decline as Export Growth Slows

November 27, 2011

Nov. 25 (Bloomberg) -- Thailand’s baht headed for a fourth weekly decline after the worst floods in almost 70 years cut production and reduced export growth to a two-year low.

Global funds sold $135 million more Thai stocks than they bought in the last four days, taking net sales for the year to $539 million, exchange data show. Exports rose 0.3 percent in October from a year earlier, the Ministry of Commerce said on Nov. 22. That compares with a 19.1 percent gain in September. Floodwaters swamped seven industrial estates north of Bangkok in recent months, shuttering factories operated by Western Digital Corp. and Honda Motor Co.

“There’s a risk of the baht being weaker in the short term and of the currency trading with a little bit more volatility,” said Dominic Bunning, a Hong Kong-based currency strategist at HSBC Holdings Plc. “Given the recent flooding, insurers’ claims could be potential flows coming through.”

The currency retreated 0.8 percent to 31.23 per dollar this week as of 10:53 a.m. in Bangkok, according to data compiled by Bloomberg. It touched 31.43 yesterday, the weakest level since August 2010.

The baht rose 0.3 percent today after the dollar’s 14-day relative strength index against it reached 69.6 on Nov. 23, a threshold that signals to some traders the Thai currency will rebound.

The yield on the 3.65 percent bonds due December 2021 gained two basis points this week to 3.432 percent, according to data compiled by Bloomberg. The rate was steady today.

The one-year onshore interest-rate swap, the fixed cost needed to receive a floating payment, declined nine basis points, or 0.09 percentage point, during the five-day period to 2.70 percent. It dropped three basis points today.

--Editors: Anil Varma, Andrew Janes

To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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