The Thai baht is projected to weaken further this week, potentially reaching 33.50 per US dollar, after touching a nine-month low of 33 earlier on Monday amid escalating tensions in the Middle East.
During Monday’s trading session, the baht fell to 33.04 against the dollar before recovering slightly to close at 32.94.
Kanjana Chockpisansin, head of research for the banking and financial sector at Kasikorn Research Centre (K-Research), said the currency is likely to remain under pressure, with the US dollar strengthening as a safe-haven asset during heightened geopolitical uncertainty.
Market sentiment has also shifted, with investors now expecting the US Federal Reserve to hold interest rates steady for the remainder of the year, pushing US bond yields higher.
The baht continues to move in line with other regional currencies, which are also weakening against the dollar. This trend reflects Asia’s heavy reliance on oil imports from the Middle East, making currencies more vulnerable during periods of rising energy prices.
Roong Sanguanruang, senior vice-president of global markets planning at Krungsri (Bank of Ayudhya), said the baht is expected to trade within a range of 32.60–33.40 per dollar this week, with depreciation pressures likely to persist.
In addition to geopolitical risks, the baht is being weighed down by a sharp drop in global gold prices, which have fallen roughly 22% from their February peak as investors rotate into oil markets.
She added that the Bank of Thailand is likely to manage currency volatility to support business costs, although higher global oil prices are expected to raise import expenses.
The central bank’s international reserves stood at US$284 billion as of March 13, down from $288 billion a week earlier.
Meanwhile, Poon Panitchpibun, a money market strategist at Krungthai Global Markets, said the baht is expected to fluctuate between 32.50 and 33.50 per dollar this year amid ongoing geopolitical uncertainty.
The currency has been trending weaker in recent sessions, reflecting concerns that the Middle East conflict could escalate further and persist for an extended period.
As a result, market expectations for monetary policy among major central banks — including the Federal Reserve, Bank of England and European Central Bank — have been adjusted accordingly.
The continued decline in gold prices, from around $4,700 per ounce to near the $4,400 support level, has also added downward pressure on the baht, he said.