Thai Baht Gains Among Muted Asian Currencies; S.Korea’s Won Slips

Thailand’s baht edged up among mostly
muted Asian currencies on Friday, after a short-lived retreat in
the dollar this week even as COVID-19 worries capped gains,
while South Korea’s won fell for a fifth straight session to hit
a 10-month low.
Most Asian currencies were set to end the week lower, with
South Korea’s won the top loser and on track to post
its worst weekly performance since March last year, while Thai
baht was an outlier, gaining more than half a percent.
The baht, trading after a public holiday on Thursday, added
0.6% to mark its best day since mid-April, as investors rushed
in after the U.S. dollar slipped on Wednesday following a tame
U.S. inflation reading.
The dollar index, which measures the greenback
against a basket of currencies, stood firm at 92.966 on Friday,
after sliding to 92.800 on Wednesday and providing a temporary
respite to Asia’s risk-sensitive markets.
“When the Thai market entered the holiday period on
Wednesday, lots of people were caught off guard from the falling
dollar, which moved against their short Thai baht positions,”
Poon Panichpibool, Markets Strategist at Krung Thai Bank said.
“It’s just a short-term break for the baht; still expect it
to weaken further due to the worsening COVID-19 situation tmsnrt.rs/2FkV6wq
in the country which could urge more selling of Thai assets
from foreign investors.”
In South Korea, the won declined more than half a
percent, down for a fifth consecutive day as the country battles
to contain the spread of the more contagious Delta variant of
the coronavirus.
The country also saw massive foreign outflows of 1,667.3
billion won ($1.43 billion) worth of shares on the main board on
Friday, further hurting the sentiment.
Malaysian equities slipped into negative territory,
paring earlier gains, as the central bank lowered its economic
growth forecast here
for 2021 to between 3% and 4% from an earlier forecast of
between 6% and 7.5%.
The ringgit was largely unchanged despite Bank Negara
Malaysia flagging the likelihood of the currency being “exposed
to periods of heightened volatility” from global and domestic
economic recovery uncertainty.
Among equities, Thai benchmark index and India’s
Nifty 50 were the sole gainers, adding half a percent
each.

– Reuters