Thai baht drops for 4th week as Asian FX feels Delta variant heat
The Thai baht was headed towards its fourth weekly loss on Friday as confidence in the country's tourism-reliant economy waned amid a rapidly spreading Delta variant of coronavirus in Asia and abroad that has clouded global growth outlook.
South Korea's won fell 0.4% to end lower for a third day after Seoul was put under the tightest coronavirus curbs, while Indonesian rupiah and the Singapore dollar eased 0.2% each.
The baht, Asia's worst performing currency this year, dropped 0.7% to 32.68 per dollar ahead of Prime Minister Prayuth Chan-ocha's decision on
imposing more travel restrictions. The baht last traded at this level during the COVID-19 outbreak in April 2020.
All regional currencies weakened after the U.S. Federal Reserve's hawkish shift in tone at the June meeting but the baht suffered the most as strict curbs whacked consumption and the tourism industry, which accounts for 12% of gross domestic product (GDP) of the country.
"The baht's Achilles heel is decimated tourism," HSBC analysts said in a note, expecting it to weaken further amid slow recovery as they lowered their year-end projection for the currency by about 7% to 33.0 per dollar.
Investor sentiment had also taken a hit since the Bank of Thailand slashed its growth forecast for the economy last month, predicting it would return to pre-pandemic levels only by 2023.
Reference: Reuters
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