Bloomberg News

Baht Rises on Speculation of Insurance Inflows, Exporter Demand

April 17, 2012

Thailand’s baht advanced toward its strongest level in two weeks on speculation the supply of dollars is increasing as overseas insurance companies honor claims related to last year’s floods.

The MSCI Asia-Pacific Index of shares snapped a two-day drop after demand for Spain’s 12-month bills increased at an auction yesterday, easing concern Europe’s debt crisis will worsen. The baht has strengthened 0.2 percent this month after exports rose 0.9 percent in February from a year earlier, halting three months of declines.

“There is continued speculation of flood-related insurance inflows and exporter demand, which provide support for the local currency,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank Ltd. in Tokyo. “Asian currencies got a boost as the pessimistic mood in the market regarding Europe’s situation was corrected a bit.”

The baht appreciated 0.1 percent to 30.78 per dollar as of 8:35 a.m. in Bangkok, according to data compiled by Bloomberg. It touched 30.72 in offshore trading on April 13, the strongest level since March 28. Local financial markets were closed on April 13 and April 16 for public holidays.

One-month implied volatility, a measure of foreign-exchange swings used to price options, was unchanged at 4.52 percent.

The yield on the government’s 3.25 percent bonds due June 2017 rose one basis point, or 0.01 percentage point, to 3.52 percent, according to data compiled by Bloomberg.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

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


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