Baht Advances Most in Three Months as Bangkok Shutdown Peaceful

Thailand’s baht strengthened the most in almost three months and stocks rose as no violence was reported at a blockade of central Bangkok by anti-government demonstrators.

The protest is likely to remain peaceful, Charamporn Jotikasthira, president of the Stock Exchange of Thailand, said in an e-mailed statement today. Prime Minister Yingluck Shinawatra’s administration has faced more than two months of street rallies demanding her resignation and electoral reforms. The baht strengthened for a third day as the latest U.S. jobs data eased concern the Federal Reserve will quicken reductions in its debt purchases that have buoyed emerging markets.

“At least we don’t see any significant developments on the domestic political front,” said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. “There’s some support from U.S. data side for the baht. Still, political unrest is lingering and the baht is unlikely to gain sharply.”

The local currency climbed 0.7 percent, the most since Oct. 17, to 32.74 per dollar as of 4:46 p.m. in Bangkok, according to data compiled by Bloomberg. It reached 32.714 earlier, the strongest level since Jan. 2. One-month implied volatility in the baht, a measure of expected moves in the exchange rate used to price options, increased eight basis points, or 0.08 percentage point, to 7.23 percent.

The SET Index of domestic shares added 1 percent to 1,295.87, the highest close since Dec. 27, extending yesterday’s 2.2 percent advance.

Bangkok Blockade

Demonstrators in Bangkok, who rejected a government offer to discuss a postponement of elections scheduled for Feb. 2, set up stages yesterday in the capital, forcing thousands of commuters onto crowded trains and ferries. The blockade may last for five to seven days, National Security Council head Paradorn Pattanatabut said yesterday.

Most businesses, tourist attractions and shopping malls remain open in Bangkok, while train, ferry and bus operators have increased capacity to cope with the shutdown, the Tourism Authority of Thailand said on its website.

“It seems the market is taking comfort in the fact that the government may give in to some of the demands of the protesters,” said Leslie Tang, Singapore-based senior currency analyst at Malayan Banking Bhd. “Also, it helps that the shutdown so far has been relatively peaceful.”

Demonstrators will continue blocking government workers from entering ministry buildings in Bangkok to force Yingluck to step down, Suthep Thaugsuban, the group’s leader, said today.

U.S. employers added 74,000 workers last month, the least since January 2011, official figures showed on Jan. 10. The median forecast in a Bloomberg survey was for an increase of 197,000. The Fed said in December it will cut its monthly debt buying by $10 billion to $75 billion starting January amid signs of an improvement in the labor market.

The yield on the 3.875 percent government bonds due June 2019 was little changed at 3.44 percent, according to data compiled by Bloomberg.

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