THB – Thailand Central Bank Warning Signs

THB – Thailand Central Bank Warning Signs

A blast against speculators by the Bank of Thailand has put traders on notice that gains for Asia’s best-performing currency this year could slow or even reverse. The central bank has asked commercial banks to provide more information if they see an “unusually high volume of transfers between non-resident baht accounts which may relate to baht speculation”.

On Tuesday the US dollar rose to Bt33.265 from a 27-month low at Bt33.182 on Monday just ahead of the central bank comments. The dollar has fallen 7.8 per cent against the baht this year to its weakest point in more than two years. The Thai currency has been buoyed by a strong national current account as well as the greenback’s widespread weakness that has left all but two of the region’s currencies standing higher for the year.

The comments were considered a warning sign from the central bank that it was growing unhappy with the baht’s steady rise since previous remarks had been limited to describing the appreciation as in line with Thailand’s economic fundamentals. The news was enough to give Citigroup’s Asian strategy team pause, although the bank maintained a long-term long baht position.

“The risk of more restrictions will probably drive short-term baht under performance and may lead to a reduction of fixed income exposure,” the bank’s analysts said in a note. The baht’s strength had led currency analysts to steadily revise higher their forecasts for year-end levels as the central bank, until this week, appeared to accept the move higher. In January, consensus estimates put the dollar at Bt36.5 by the end of 2017, according to Bloomberg. Analysts now forecast Bt33.50.


Last week the bank raised its forecast for the baht to Bt32.5 against the dollar by year-end from 34, and moved next year’s forecast to Bt31 from Bt35. The stabilising of the country’s economy under the military junta, as well as a global pick-up in exports, has also produced a rising current account surplus over the past three years — now at 11 per cent of gross domestic product, the second-largest among emerging markets, according to Société Générale. “The strong momentum in the current account balance is likely to be sustained in coming quarters,” said Amit Agrawal, emerging markets strategist at the bank. The strong position has allowed the BoT to rebuild reserves, which have risen about 13 per cent in the past year to stand at $220bn.

Technical Analysis


Overall, the bias in prices is: Downwards.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

The projected upper bound is: 33.30.

The projected lower bound is: 32.97.

The projected closing price is: 33.13.


A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 28.3582. This is not an overbought or oversold reading. The last signal was a buy 21 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 32.84. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 13 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -134.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 2 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 18 period(s) ago.

Rex Takasugi – TD Profile

FOREX THB= closed down -0.020 at 33.150. Volume was 22% below average (neutral) and Bollinger Bands were 66% narrower than normal.

Open    High       Low      Close     Volume
33.170  33.200   33.110  33.150  8,057

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages:  10-period   50-period   200-period
Close:                        33.22          33.51            34.55
Volatility:                 3                  3                   4
Volume:                    8,914          10,044        10,871

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


FOREX THB= is currently 4.0% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of THB= (mildly bearish). Our trend forecasting oscillators are currently bullish on THB= and have had this outlook for the last 1 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

“Investing in Thailand? Contact Us.”

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Ivy Heffernan

Ivy Heffernan, student of Economics at Buckingham University. Junior Analyst at HeffX and experienced marketing director.

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