Thai Central Bank’s Monetary Policy Committee maintained its key policy rate at 2.75% as expected. All 7 members of the MPC voted in favor of keeping current, assessing that 2012′s accommodative monetary policy stance had “significantly shored up private sector confidence, supported post-flood recovery, and helped cushion the economy from the global economic headwinds.”
The announcement also stated that Q4 economic growth would be higher than estimated, leading to a upward revision for both 2012 and 2013 figures. All in all, this announcement is more hawkish and the outlook of the economy according to the Thais look to be cheery.
Baht strengthened after the announcement. Daily Chart showed that recent USD strength brought about by the hawkish FOMC minutes was not able to bring the Baht back to the trading band seen in Q4 2012. Bearish bias remain strong, though this announcement may not be a game changer simply due to the fact that most analysts, if not all, had correctly called the Central Bank action.
Weekly chart suggest at support around 30.30 level, around the 2012 low. A break below this support level may encourage bears to push price further lower into 29.5 – 30.0 range. Trading back into the Daily Chart consolidation area above would give hope to bulls looking for a repeat of Q1 2012, which saw the Baht weakening to almost 32.0 versus the Greenback.
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