Baht Set for Biggest Weekly Loss Since June on Export Concern

Thailand’s baht was headed for its biggest weekly loss since June amid concern its appreciation to a 17-month high versus the dollar and a four-year high against the yen will hurt exports. Government bonds held steady.

The currency snapped a run of seven weekly rallies after Thailand reported overseas sales data on Jan. 23 that missed economist estimates. Finance Minister Kittiratt Na-Ranong said yesterday he would like to see the baht “a little bit” weaker as appreciation was putting pressure on exporters. The currency reached the strongest level since August 2011 versus the dollar on Jan. 21 and hit the highest level since October 2008 versus the yen today.

“The authorities are getting more uncomfortable with sharp appreciation against the dollar and the yen,” said Wee-Khoon Chong, a strategist at Societe Generale SA in Hong Kong.

The baht slumped 0.4 percent from a week ago and 0.2 percent today to 29.86 per dollar as of 8:50 a.m. in Bangkok, according to data compiled by Bloomberg. That was the first five-day loss since a period ended Nov. 16 and the biggest weekly drop since June 22. It rose 0.7 percent today versus the Japanese currency to 3.0289 yen, earlier hitting a four-year high of 3.0410 earlier.

One-month implied volatility, a measure of expected moves in exchange rates used to price options, jumped 35 basis points, or 0.35 percentage point, to 4.67 percent this week. The rate climbed 22 basis points today.

Exports, which account for about two-thirds of Thailand’s economy, rose 13 percent in December after an increase of 27 percent the previous month, according to official data. The median forecast of economists in a Bloomberg survey was for a gain of 21.5 percent. Japan is the second-largest buyer of Thai shipments, after China, and the U.S. is the third-biggest.

The yield on the 3.125 percent government bonds due December 2015 held steady this week and today at 2.93 percent, data compiled by Bloomberg show.

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

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net