Poon Panichpibool, Krungthai GLOBAL MARKETS Strategist at Krungthai Bank Public Company Limited (SET: KTB), stated that the Thai baht (USD-to-THB) is expected to maintain its appreciation trend throughout the first quarter of 2026, as the current momentum remains strong.
Although Thai authorities recently announced measures to mitigate the impact of gold price volatility on the baht and expressed their readiness to prevent unusual exchange rate fluctuations, the strengthening trend persists.
Poon assessed that as long as gold prices continue to be supported and rise further, this could still lend some strength to the baht, especially if such support aligns with a weakening US dollar. However, if gold prices surge due to a clear risk-off scenario (not related to an AI stock bubble, which usually pressures the US dollar given the U.S. stock market’s sensitivity to the issue), the result may instead keep the US dollar stable or stronger.
At the same time, the baht could face depreciation pressure from increased foreign investor sell-offs in Thai equities, which would limit the benefit of rising gold prices for the baht. Furthermore, if gold prices increase “rapidly and sharply” in the short term, the baht may actually weaken due to changing market dynamics as players chase gold prices.
In the bond market, the U.S. 10-year bond yield recently moved sideways around the 4.16% zone, briefly testing 4.20%. The direction of the US 10-year bond yield is still primarily driven by 1) the Fed’s interest rate outlook, 2) the fiscal position of the U.S. government, and 3) overall financial market sentiment.
As such, Poon recommended that market participants adopt a “Buy on Dips” approach for long-term bonds, emphasizing purchases when the U.S. 10-year yield rises. Investors should refrain from chasing prices higher, waiting for yields to increase further to ensure a favorable risk and reward.
