Thai baht weakened as much as 1% on Monday to THB37.74 against the US dollar amid speculation for another aggressive interest rate hike by the Federal Reserve in November.
The baht weakening came off its peak of THB38.315 in late September, marking the highest level since 2006.
Now, the market is pricing in 82% probability for a 75 basis points interest rate hike at the Fed’s next meeting in early November, then 50 basis points in December and another 25 basis points in February 2023, pushing the Fed’s funds rate to 4.5%-4.75% range.
Concerns for another strong rate hike by the U.S. central bank came after the nonfarm payrolls increased 263,000 in September, slightly lower than the Dow Jones estimate for 275,000. Meanwhile, the unemployment rate was 3.5%, down 0.2 percentage point.