Why Thailand Currency’s Surge Defies Economic Gravity

The Thai baht is heading for its biggest annual gain against the US dollar in eight years. At first glance, there seems to be little to justify its outperformance against regional peers. Thailand’s economy is far from robust, weighed down by sluggish tourism, high household debt and a 19% tariff on exports to the US.

The currency move, driven partly by a rally in gold prices, is making the southeast Asian country’s manufacturers less competitive, adding to the challenges facing recently appointed Prime Minister Anutin Charnvirakul, whose government faces an early election in February.