USD/THB: Thai Baht faces reversal risk - Bloomberg
- Thai baht has gained more than 6 percent in 2019.
- The easing of trade tensions could weaken haven demand for baht.
Thai Baht (THB), Asia's best-performing currency of 2019, could come under pressure as an easing of trade tensions will likely weaken haven demand for the currency.
Thailand's currency is currently trading at 30.176 per US dollar, representing a 6.62 percent rise on a year-to-date basis.
The bullish move, however, seems to be losing momentum. The baht has climbed just 0.1% in December, making it the region’s worst-performing currency, according to Bloomberg.
Notably, the upside has been capped around 30.15 since the last week of October.
The baht may continue this underperformance if US-China trade relations improve further as Bloomberg’s analysis of 19 emerging-market currencies shows Thailand's currency is one of the currencies that are least responsive to the move in China's Yuan.
Investors often treat baht as a haven asset, as the currency is backed by a hefty current account surplus and a sizable pile of foreign reserves
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
