Thai Baht Falls as Global Slowdown May Hurt Exports; Bonds Rise

Thailand’s baht fell the most in four weeks and government bonds rose amid concern a global economic slowdown will hurt exports.

South Korea, India, Indonesia and Taiwan all released trade figures since the start of August showing slides in their overseas sales, while Thailand’s shipments declined in six of the eight months through June. Data released yesterday showed the euro-area economy shrank in the second quarter as a regional debt crisis and austerity measures forced at least six nations into recessions.

“Weakening global growth is finally taking its toll on Asian exports,” said Wee-Khoon Chong, a fixed-income strategist at Societe Generale SA in Hong Kong. “This in turn is likely to drag Asian growth lower, which would not bode well for regional currencies.”

The baht dropped 0.4 percent to 31.54 per dollar as of 3:27 p.m. in Bangkok, the biggest loss since July 18, according to data compiled by Bloomberg. Its three-month implied volatility, a measure of exchange-rate swings used to price options, declined two basis points, or 0.02 percentage point, to 6.22 percent.

Global funds sold $1.5 million more Thai equities than they bought yesterday, ending a six-day run of net purchases that boosted their holdings by $212 million, stock exchange data show. Overseas investors reduced their ownership of Thailand’s government debt by $166 million yesterday, according to the Thai Bond Market Association.

The yield on the 3.25 percent bonds due June 2017 fell one basis point to 3.09 percent, according to data compiled by Bloomberg.

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