The Thai bhat and stock market fell due to ongoing unrest. The army has imposed martial law across Thailand as political unrest has swept the nation. The decision followed data that showed Thailand’s growth contracted .6 percent in the first quarter.
The unrest began in November with protesters demanding the removal of elected leader Yingluck Shinawatra. Prapas Tonpibulsak, chief investment officer at Krungsri Asset Management that has roughly $7 billion under management, said “some foreign investors will dislike the martial law because it shows the situation is out of hand.” Thailand has had to deal with large capital flight since the coup began.
The bhat regained some of its losses on speculation that the central bank could intervene. USDTHB has pulled back from the supply zone at 32.60, and the pair will likely find support at 32.25. Expect the US dollar to gain some ground back to retest the supply zone. There looks to be no end in sight for the turmoil in Thailand, which should continue the weakening bhat. The pair is likely to see 32.70/75 with May coming to a close.