The success of the Bank of the Japan in weakening the yen had guided the direction of Thai baht for the whole week. On Monday, the baht began Asian trading at 44.40/45 THB/USD, a few satang change from the closing rate at 44.42/45 THB/USD on last Friday.  As said earlier, the yen moved from 119.30 YEN/USD to 119.80 YEN/USD. The baht followed this direction, gradually weakening to 44.72 THB/USD on Tuesday afternoon since both importers and offshore players came in the market to buy USD. The players had taken profit, causing the baht to surge to 44.64/68 THB/USD. However, the unexpected tumble of the yen to 121.35 YEN/USD caused the baht to decline to 44.80 THB/USD and to close at 44.75/80 THB/USD.

 

The Fed decided to cut its interest rates by another 50 basis points to stimulate the US economy as expected, causing the yen to move below 121 YEN/USD again. The baht also followed the yen movement. On Wednesday, the local currency opened at 44.63/68 THB/USD. Since players still preferred long USD against Thai baht and there was rumour that the Bank of Thailand stepped in to the market on Tuesday to buy USD to repay its debt, Thai baht was thus dragged down to 44.75 THB/USD.

 

On Thursday, Thai baht opened at 44.67/70 THB/USD and shortly surged up to 44.58 THB/USD. However, importers showed up in the market to bid USD. The baht closed at 44.67/70 THB/USD. For the last trading day, the baht opened at 44.62/65 THB/USD and immediately moved to over 44.70 THB/USD for the rest of the session and closed at 44.71/74 THB/USD.