Baht likely to climb higher if Fed disappoints on rates

The baht, which traded at a six-week high of 35.86 to the United States dollar on Tuesday morning, is likely to appreciate further if the Federal Reserve fails to produce a clear statement about US interest rate trends at its meeting this week, say analysts. Kanjana Chockpisansin, head of research at Kasikorn Research Center, said the baht has appreciated quickly from 36.50 to the greenback last week. Investors who held lots of dollars recently sold the US currency to reduce risks as they await the result of the Fed meeting on Oct 31-Nov 1. High domestic gold prices have also prompted people to rush to gold shops to sell as the Middle Eastern war between Israel and Hamas is likely to intensify, said Ms Kanjana. As a result, gold shops have increased their gold exports, pushing the dollar to weaken against the baht, she said. The baht remains highly volatile, falling to below 36.10 to the dollar before noon on Tuesday, said Ms Kanjana.