Thai Baht Gains Most in 5 Weeks as Opposition Parties Lead Vote

Karl Lester M. Yap and Matthew Burgess
·2 min read

(Bloomberg) -- The Thai baht advanced by the most in more than five weeks after opposition parties emerged as the biggest winners in elections over the weekend.

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The baht climbed as much as 0.9% to 33.70 per dollar on Monday, the biggest advance since April 5, before paring its gain to 0.5%.

Pro-democracy parties Move Forward and Pheu Thai looked set to win majority of seats, putting them on course to wrest power from a military-backed government that has ruled for almost a decade. The baht, which is among the top performers in emerging Asia this year, may get a further boost after economic growth data beat estimates last quarter.

“There is a tendency for the Thai baht to strengthen in the weeks following an election,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. in Singapore. “Should history repeat, we can expect USD/THB to head lower and potentially test support at the 33.5 level.”

Gross domestic product rose 2.7% from a year ago, faster than the median 2.3% expansion estimated by economists in a Bloomberg survey.

Waiting Game

It may take weeks to months before a clear picture emerges on who will form the government, said Vijay Kannan, a macro strategist at Societe Generale SA in Singapore.

“We prefer to fade the election-related rally in Thai baht,” Kannan wrote in a note to clients. Once the dust settles, the company may turn more bullish on the currency as the medium-term outlook on Thailand’s balance of payments remains favorable, he said.

(Updates to include GDP data and analyst comment. An earlier version of this story was corrected to say the baht gained by the most in more than five weeks in the first and second paragraphs.)

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