Thailand’s baht had a fifth weekly decline and government bonds rose on concern growth in Southeast Asia’s second-biggest economy is slowing.
The local currency dropped to the weakest level in almost two years yesterday as a central bank report showed exports shrank for the sixth time in seven months in April. Manufacturing in China, the biggest buyer of Thailand’s exports, rose less than economists forecast in May, according to government data released today.
“The baht depreciated in line with regional currencies amid risk-off sentiment from Europe’s debt problems,” said Kozo Hasegawa, a Bangkok-based trader at Sumitomo Mitsui Banking Corp. “There is concern about the export outlook with some slowdown not only in Europe but also in China.”
The baht, little changed today, slumped 0.5 percent this week to 31.85 per dollar as of 3:20 p.m. in Bangkok, according to data compiled by Bloomberg. The currency touched 31.96 yesterday, the lowest level since August 2010, and Hasegawa predicts it will trade between 31.75 and 32.00 next week.
One-month implied volatility, a measure of exchange-rate swings used to price options, was steady this week and today at 4.52 percent.
The yield on the government’s 3.25 percent bonds due June 2017 dropped nine basis points, or 0.09 percentage point, to 3.52 percent from a week ago and three basis points from yesterday, according to data compiled by Bloomberg.
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