Bloomberg News

Baht Drops From 1-Week High as Importers May Boost Dollar Buying

July 18, 2012

Thailand’s baht fell from a one-week high on speculation importers will step up dollar purchases to take advantage of a more favorable exchange rate. Bonds held steady.

A government report due as early as this week may show imports climbed 13.4 percent in June after an increase of 18.2 percent the previous month, according to the median estimate of economists in a Bloomberg survey. Southeast Asia’s second- largest economy probably posted a fourth monthly trade deficit amounting to $1.2 billion, the analysts estimated.

“Importers, including gold companies, may want to buy the dollar as the baht strengthened lately,” said Norawit Suparinayok, a foreign-exchange trader at Bangkok Bank Pcl. (BBL) “Risk sentiment is quite stable and some investors may think gold prices will go up.”

The baht dropped 0.4 percent to 31.69 per dollar as of 3:22 p.m. in Bangkok, according to data compiled by Bloomberg. The currency touched 31.54 yesterday, the strongest level since July 6. Its one-month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 5.02 percent.

The yield on 3.25 percent government bonds due June 2017 held at 3.23 percent, according to data compiled by Bloomberg.

Gold dropped 0.4 percent this week to $1,582.75 an ounce.

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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