Bloomberg News

Baht Steady Near Two-Week High After Funds Buy More Thai Assets

July 04, 2012

Thailand’s baht was steady near a two-week high after global funds boosted holdings of the nation’s assets amid speculation central banks in developed countries may ease monetary policy. Government bonds held steady.

International investors bought $109 million more local equities than they sold in the first two days of this week, exchange data show after the finance ministry raised its 2012 growth forecast to 5.7 percent on June 28 from its March prediction of about 5.5 percent. The MSCI Asia-Pacific Index of shares rose for a sixth day ahead of an expected European Central Bank rate cut tomorrow and as the International Monetary Fund said further monetary-policy easing by the Federal Reserve may be needed.

“There is growing speculation about additional monetary easing in the U.S. and Europe, which supported market sentiment,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “That makes it easier for investors to take risks, helping to boost emerging-market currencies.”

The baht was unchanged from yesterday at 31.48 per dollar as of 3:07 p.m. in Bangkok and touched 31.38, the strongest level since June 20, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, was steady at 4.52 percent.

Thailand’s consumer confidence rose in June as easing oil prices and improving economic indicators support the nation’s outlook. An index (MXAP) measuring sentiment rose to 68.5 from 67.1 in May, the University of the Thai Chamber of Commerce said today. The gauge is based on a survey of 2,232 respondents.

Global funds pumped a net $355 million into government debt yesterday, the biggest net purchase since June 19, according to data from the Thai Bond Market Association.

The yield on the 3.25 percent bonds due June 2017 was little changed at 3.35 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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