Thai baht likely to be increasingly susceptible to 2019 general election on March 24, says Scotiabank

The Thai baht is expected to be increasingly susceptible to this year’s general election, scheduled to be held on March 24, after the local currency recouped some of its Friday’s losses on Monday, according to the latest research report from Scotiabank.

Thailand’s Election Commission on Monday formally blocked Princess Ubolratana Rajakanya’s prime ministerial bid for the Thai Raksa Chart party, after King Maha Vajiralongkorn on Saturday issued a rare order to denounce his sister’s unprecedented foray into politics.

Meanwhile, Thailand’s sound fundamentals and the BoT’s relatively hawkish stance are still supportive of the THB. The nation’s current account surplus widened to USD5.03 billion in December from USD1.63 billion a month ago, compared to market forecast of USD3.48 billion.

The Bank of Thailand (BoT) left its policy rate unchanged at 1.75 percent last Wednesday, with two of the six MPC members of the central bank calling for a 25 bps rate hike. One member was absent. 

"We remain bullish on the THB and will sell USD/THB if the pair rallies to 32.0 or falls below 31.0. Fed Chairman Jerome Powell is likely to reiterate his dovish stance when testifying before the Senate and the House respectively on 26 February and 27 February," the report added.