Baht Drops a Second Day as China Data Damp Outlook for Exports

Thailand’s baht declined for a second day on concern exports will cool as manufacturing slows in China, the biggest overseas buyer of Thai goods.

The Purchasing Managers’ Index in Asia’s biggest economy fell to 50.4 last month, the lowest reading since February 2009, the China Federation of Logistics and Purchasing said today. The baht retreated from near its strongest level in a month after Japan intervened in the foreign-exchange market yesterday to weaken the yen, spurring speculation regional central banks will follow suit to protect their exports.

“China’s data raised concern demand for exports from the rest of Asia will cool,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Many Asian nations depend on exports for growth and so Japan’s intervention triggered speculation of other central banks’ action as well.”

The baht dropped 0.3 percent to 30.84 per dollar as of 3:12 p.m. in Bangkok, according to data compiled by Bloomberg. The currency dropped 0.7 percent yesterday, the most since Oct. 20.

The yield on the government’s 5.25 percent bonds due May 2014 rose one basis point, or 0.01 percentage point, to 3.19 percent, according to data compiled by Bloomberg.

A government report today showed consumer prices gained 4.19 percent in October from a year earlier, holding above 4 percent for the seventh straight month as the worst floods in almost 70 years destroyed crops and stoked food costs.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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