Yingluck Dissolves Parliament, Baht Sees Resistance at 32

by on December 9, 2013 4:54 am GMT

Thailand’s Prime Minister Yingluck Shinawatra will dissolve parliament as ongoing protests continue to mount pressure. Protests began as the Prime Minister was looking to pass a bill to grant amnesty for the criminal actions from her predecessor, Yingluck’s brother.

The Thai baht gained on the dollar last week, but support for USDTHB remained at 32. The protests and riots struck fear in global investors as $587 million were pulled from equities and debt this month. PM Shinawatra proposed a decree to rid Thailand of the current administration and have new elections.

“This would calm market sentiment as the politics wouldn’t be as big a concern as before,” said Pareena Phuangsiri, an analyst at Kasikornbank PCL. Phuangsri also said that “the baht can follow gains in other regional currencies today. But in the longer-term it will still drag on because this is not what the demonstrators were asking for.” Demenstrators said they would continue to protest regardless of whether new elections are held or not.

The current Parliment’s opponets said their primary goal was to rid Thailand of the political influence of Yingluck’s brother, former Prime Minister Thaksin Shinawatra. Allies of Shinawatra has won every election since the 2006 political coup in Thailand.

There was a sharp bounce in the intraday RSI, currently at 45. The USDTHB sold off from the top of an ascending channel after price action momentarily breeched 32.30. There was buying underneath 32 after the selloff, and tonight’s early trade shows 32 a meaningful support level.

4H Chart of USDTHB

4H Chart of USDTHB