Thai Baht, Bonds Decline This Week on U.S. Data, Syria Tensions

Thailand’s baht was set for its fourth weekly decline, the longest losing streak in three months, and bonds fell before U.S. jobs data that may influence expectations for when the Federal Reserve will rein in stimulus.

The baht dropped to a three-year low ahead of data today that may show U.S. employers added 180,000 jobs in August after an increase of 162,000 the previous month, according to the median forecast in a Bloomberg survey of economists. Global investors sold $31 million more Thai equities than they bought this week through yesterday, exchange data show, amid concern the U.S. is moving closer to a military strike against Syria.

“The biggest focus in the market now is the U.S. employment data to assess the outlook for the Fed’s reduction in stimulus,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Emerging-market currencies and assets are under downward pressure and such severe conditions will probably continue for a while. Syria tensions are adding to weak sentiment.”

The baht lost 0.7 percent this week and 0.2 percent today to 32.37 per dollar as of 8:38 a.m. in Bangkok, according to data compiled by Bloomberg. The currency touched 32.41 earlier, the weakest level since July 2010.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, climbed 32 basis points, or 0.32 percentage point, to 7.53 percent this week. The gauge was little changed today.

The Fed will start to slow its $85 billion a month of bond purchases at its Sept. 17-18 meeting, according to 65 percent of economists surveyed by Bloomberg last month. The U.S. Senate Foreign Relations Committee voted 10-7 this week in favor of a resolution authorizing limited action against Syria.

The yield on Thailand’s 3.625 percent sovereign bonds due June 2023 rose 10 basis points from a week ago and two basis points today to 4.42 percent, data compiled by Bloomberg show. That is the highest level for a benchmark 10-year note since November 2009.

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

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