The nation had a trade deficit of $1.7 billion in May as an 18 percent increase in inbound shipments outstripped export growth of 7.68 percent, government data showed this week. The Bloomberg-JPMorgan Asia Dollar Index was steady before European leaders begin a two-day meeting in Brussels tomorrow to discuss ways to tackle the region’s debt crisis.
“The deficit in the trade balance may continue for a while as imports of machinery related to last year’s floods have been climbing,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “The baht tends to see downward pressure from this aspect. Risk sentiment is quite neutral as investors are waiting for the results of the European Union summit.”
The baht retreated 0.2 percent to 31.88 per dollar as of 3:12 p.m. in Bangkok, according to data compiled by Bloomberg. The currency touched 31.96 on June 25, the weakest level since May 31. It has dropped 3.2 percent this quarter and 1 percent in 2012. The baht’s one-month implied volatility, a measure of exchange-rate swings used to price options, held at 4.52 percent.
The yield on the 3.25 percent bonds due June 2017 was little changed at 3.33 percent, according to data compiled by Bloomberg.
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