(Bloomberg) — Thailand’s baht slid to the lowest level since March last week but there are reasons to believe it will bounce back in coming months.
The currency is poised to recover as an upsurge in Chinese tourists bolsters the nation’s finances, while any resolution to the political standoff that is dragging down Thai assets will likely lead to a relief rally, analysts say.
“A significant influx of tourists in the second half can contribute to a surplus in the current account by boosting tourism receipts, which will positively affect the value of the baht,” said Poonyawat Sreesing, a senior economist at Siam Commercial Bank Pcl in Bangkok. The baht may appreciate to as strong as 32 per dollar by year-end, about 10% stronger than the current level, he said.
The baht has been dragged lower in recent weeks as the coalition of pro-democracy parties that gained the most seats in the May 14 election have struggled to secure enough support from the pro-establishment senate to form a government.
The protracted stalemate helped send the baht to as low as 35.285 per dollar on Friday, the weakest level since March 1. The currency has now declined about 3.5% since the day before the vote, the worst-performing Asian emerging currency over the period after the Malaysian ringgit.
Landing Slots
Help may be on the way. Visitors from China and Australia should help lead an increase in tourism this month as airlines are in talks with the local airport authority to increase landing slots, the Tourism and Sports Ministry said in May.
Chinese tourist arrivals were only about 40% of pre-pandemic levels on a monthly basis as of April, which means there’s still significant room to improve in coming months as flight capacity increases, Chua Han Teng, an economist at DBS Group Holdings Ltd. in Singapore, wrote in a client note last week.
Initial signs the influx is filtering through the economy may be revealed in May current-account data due this Friday. The numbers unexpectedly deteriorated in April due to a slide in exports., leaving room for a potential upside surprise.
Some Negatives
Baht bears says there are plenty of reasons for possible further losses.
Weakness in the Chinese yuan may weigh on the baht, given the close correlation between the two currencies, said Vijay Kannan, an Asia macro strategist at Societe Generale Singapore Branch. The risks of worsening external demand and an underwhelming recovery in China could also negatively impact Thai exports, he said.
Diverging monetary policy between the US and Thailand may also drag the baht lower. The Federal Reserve is still signaling two more interest-rate hikes this year, while economists are almost certain the Bank of Thailand’s key rate has already peaked at its current level of 2%.
Close to Success
Those negatives may count for little though if there’s a breakthrough in the political deadlock.
Parliament will meet July 3, setting in motion the process of new government formation followed by the vote to elect a prime minister. The eight-party coalition of pro-democracy parties fronted by Move Forward said last week it’s close to securing enough support from the Senate to form a government led by its Harvard-educated leader Pita Limjaroenrat.
“If there is resolution on the political front, potentially there could be a correction lower in USD/THB,” Societe Generale’s Kannan said
Here are the key Asian economic data due this week:
Monday, June 26: Japan PPI, Singapore industrial production, Taiwan industrial production
Tuesday, June 27: Taiwan unemployment rate
Wednesday, June 28: Australia CPI, China industrial profits, South Korea consumer confidence
Thursday, June 29: Australia retail sales and job vacancies, New Zealand activity outlook, business confidence, Japan retail sales, South Korea business surveys
Friday, June 30: China PMIs and current-account balance, Thailand current-account and trade balance, Australia private sector credit, New Zealand consumer confidence, Japan jobless rate, industrial production and Tokyo CPI, South Korea industrial production
OTTAWA – Prime Minister Justin Trudeau says the NDP is caving to political pressure from Conservative Leader Pierre Poilievre when it comes to their stance on the consumer carbon price.
Trudeau says he believes Jagmeet Singh and the NDP care about the environment, but it’s “increasingly obvious” that they have “no idea” what to do about climate change.
On Thursday, Singh said the NDP is working on a plan that wouldn’t put the burden of fighting climate change on the backs of workers, but wouldn’t say if that plan would include a consumer carbon price.
Singh’s noncommittal position comes as the NDP tries to frame itself as a credible alternative to the Conservatives in the next federal election.
Poilievre responded to that by releasing a video, pointing out that the NDP has voted time and again in favour of the Liberals’ carbon price.
British Columbia Premier David Eby also changed his tune on Thursday, promising that a re-elected NDP government would scrap the long-standing carbon tax and shift the burden to “big polluters,” if the federal government dropped its requirements.
This report by The Canadian Press was first published Sept. 13, 2024.
Simon Jolin-Barrette, minister responsible for consumer protection, has tabled a bill to force merchants to calculate tips based on the price before tax.
That means on a restaurant bill of $100, suggested tips would be calculated based on $100, not on $114.98 after provincial and federal sales taxes are added.
The bill would also increase the rebate offered to consumers when the price of an item at the cash register is higher than the shelf price, to $15 from $10.
And it would force grocery stores offering a discounted price for several items to clearly list the unit price as well.
Businesses would also have to indicate whether taxes will be added to the price of food products.
This report by The Canadian Press was first published Sept. 12, 2024.
Quebec legislature member Youri Chassin has announced he’s leaving the Coalition Avenir Québec government to sit as an Independent.
He announced the decision shortly after writing an open letter criticizing Premier François Legault’s government for abandoning its principles of smaller government.
In the letter published in Le Journal de Montréal and Le Journal de Québec, Chassin accused the party of falling back on what he called the old formula of throwing money at problems instead of looking to do things differently.
Chassin says public services are more fragile than ever, despite rising spending that pushed the province to a record $11-billion deficit projected in the last budget.
He is the second CAQ member to leave the party in a little more than one week, after economy and energy minister Pierre Fitzgibbon announced Sept. 4 he would leave because he lost motivation to do his job.
Chassin says he has no intention of joining another party and will instead sit as an Independent until the end of his term.
He has represented the Saint-Jérôme riding since the CAQ rose to power in 2018, but has not served in cabinet.
This report by The Canadian Press was first published Sept. 12, 2024.
