Thailand’s baht completed a weekly advance as the government said exports are improving this quarter and data showed the U.S. economic recovery is gaining momentum. Government bonds fell, halting a three-week rally.
The local currency strengthened for a fourth day today, erasing a monthly loss, even after Standard & Poor’s cut Spain’s credit rating by two levels yesterday. An official report yesterday showed Thai exports to the U.S. and China rose in March. Federal Reserve Chairman Ben S. Bernanke said this week he’s prepared to add more stimulus if needed as the monetary authority upgraded its outlook for the world’s largest economy.
“It’s still risk-on with the Fed view and the U.S. recovery signs,” said Amonthep Chawla, a market analyst at Kasikornbank Pcl (KBANK) in Bangkok. “The U.S. and Chinese economies are still growing despite the ongoing euro-area debt crisis.”
The baht appreciated 0.3 percent this week to 30.82 per dollar as of 3:39 p.m. in Bangkok, according to data compiled by Bloomberg. The currency has rebounded 0.8 percent since reaching 31.07, the lowest level in almost three weeks, on April 24. Chawla forecast the baht will rise to 29.50 by year-end.
One-month implied volatility, a measure of exchange-rate swings used to price options, was 4.52 percent, compared with 4.54 percent yesterday. That matched the lowest level since July 2011.
Thailand’s exports fell 6.5 percent in March from a year earlier, after a 0.9 percent gain in February. Overseas sales are faring better in the second quarter and the government is keeping to its forecast for 15 percent export growth in 2012, Deputy Commerce Minister Poom Sarapol said in Bangkok yesterday.
“The Thai economy continues to cruise along the path of a V-shape recovery,” HSBC Holdings Plc said in a research note yesterday. The bank is bullish on the growth outlook as data since March have showed private consumption and investment have surpassed pre-flood levels, economists Frederic Neumann and Tushar Arora wrote.
Five-year government bonds dropped this week. The yield on the 3.25 percent bonds due June 2017 rose seven basis points, or 0.07 percentage point, since April 20 to 3.59 percent, according to data compiled by Bloomberg. The yield retreated two basis points today.
The Bank of Thailand auctioned 50 billion baht ($1.6 billion) of two-year notes yesterday at 3.52 percent, compared with 3.24 percent at the previous sale of similar-maturity securities on Feb. 16. The finance ministry sold 8 billion baht of 2027 bonds on April 25, paying 4.07 percent versus 3.7745 percent in February.
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