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[ 2018-07-20 ]

Thai Baht Weakens Against the US Dollar

The views on the Thai Baht weakening against the US dollar for the rest of the year has Kasikornbank (KBank) forecasting that the baht will hit a year and a half low of 34 to the US Dollar this quarter amid large-scale capital inflows.

The US Federal Reserve is signaling two more rate hikes this year and with the escalating trade tariffs between the US and China the prediction is that Asian currencies, particularly the Yuan, will weaken and offshore funds will turn back to the US and lend support to the dollar.

With US President Donald Trump heavily promoting his America First policy the trade war will intensify until the November US midterm elections

Asia’s currency retreats and the trade conflict has seen Singapore’s exports down 5% in June, and Thailand’s merchandise shipments can be expects to follow suit in the next few months. However, KBank is still projecting Thailand’s export growth to be 8.8-9% this year, with the baht reversing the downward trend during the country’s high season for tourism in the fourth quarter. The baht could end at 33 to the dollar at years end, adjusting this figure from earlier reports of 32 THB.

In addition, it is forecasted that the US central bank will lift the policy rate again for the rest of the year and faster rate hikes could slow the world’s largest economy, thus weakening the dollar. That coupled with Thailand’s thriving economic growth will support the baht’s strength in the final quarter.

Currently the strength of the dollar is making it less expensive to buy and rent in Thailand. This is an excellent time to invest in Thailand property for people carrying US Dollars.