Baht gains as US fed holds rates

The baht ended three previous days of decline after the Federal Reserve Open Market Committee (FOMC) yesterday kept its benchmark rate at 2 per cent. The Fed gave no indication when it would start reversing its most aggressive series of rate cuts in two decades.

"The dollar will have a bit of influence on the baht today following the FOMC meeting," said Andy Robinson, a Singaporean-based emerging-markets analyst at Informa Global Markets. "The Fed was less hawkish than expected and less committed on the timeframe of a tightening bias. They seem to indicate that everything is on hold."

The baht rose 0.1 per cent against the dollar to trade at 33.56 yesterday morning, up from 33.60 on Wednesday. The currency is the biggest loser this year among Asia's 10 most active currencies and is set to be the second-worst performer this quarter as political uncertainty and a trade deficit spurred funds to leave.

Prime Minister Samak Sundaravej's five-month-old ruling coalition faces a no-confidence vote in Parliament today.

The motion will not succeed, because of the ruling party's large majority in Parliament, Robinson said.