Thai Baht Falls This Week, Bonds Rise on Global Growth Concern

Thailand’s baht dropped this week and government bonds rose as concern global growth is cooling clouded the outlook for the nation’s exports, which account for about two-thirds of the economy.

The baht had its first weekly slide since the period ended June 22 after the Asian Development Bank said yesterday the region will expand less than previously forecast in 2012 amid Europe’s debt crisis. China said today its economy grew 7.6 percent last quarter, the slowest pace in more than three years, after import numbers reported this week missed estimates.

“China’s import data is negative for countries that export goods to the country as it indicates demand is weakening,” said Kozo Hasegawa, a Bangkok-based trader at Sumitomo Mitsui Banking Corp. “There’s been growing concern over the global economic slowdown and that makes it hard for investors to take riskier positions. Sentiment is rather weak.”

The baht dropped 0.4 percent from a week ago to 31.75 per dollar as of 3:06 p.m. in Bangkok, according to data compiled by Bloomberg. The currency, which rose 0.2 percent today, touched 31.87 on July 9, the weakest level since June 29. It may trade between 31.60 and 31.90 next week, Hasegawa said.

The currency’s one-month implied volatility, a measure of exchange-rate swings used to price options, climbed 50 basis points, or 0.5 percentage point, today and this week to 5.02 percent.

The yield on the 3.25 percent bonds due June 2017 dropped one basis point to 3.32 percent this week, according to data compiled by Bloomberg. The rate was unchanged today.

Asia excluding Japan will expand 6.6 percent this year compared with an April estimate of 6.9 percent, ADB President Haruhiko Kuroda said yesterday in Bangkok. Growth will be 7.1 percent in 2013, compared with a previous forecast of 7.3 percent, he said.

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