Thai baht gains as GDP growth beats estimates; Asia FX off to muted start

The Thai baht inched higher on Monday, outperforming most other emerging market currencies in Asia, after the country posted better-than-expected economic growth data, reflecting a rebound in tourism and exports.

The baht gained as much as 0.23% against the US dollar, while stocks were trading 0.6% higher.

Growth in Southeast Asia’s second-largest economy beat market forecasts for the July-September quarter, helped by a recovery in exports, government investment and tourism-related activities, the National Economic and Social Development Council said.
The baht has declined about 7% so far this quarter, making it Asia’s worst performing currency.

“It remains to be seen how government stimulus like the cash handout measures would support private consumption amid headwind from hefty household debts,” said Poon Panichpibool, a markets strategist at Krung Thai Bank.

The overall Thai economy would recover further but at a gradual pace, said Panichpibool.

In other news, Mexico, Latin America’s second-largest economy, is seen expanding between 2% and 3% in 2025, according to the country’s proposed budget on Friday, higher than the IMF forecast of 1.3%.

The Mexican peso was down 0.3%.

Investors in emerging Asia are now keenly awaiting the Indonesian central bank’s monetary policy decision due on Wednesday.

Asian currencies extend losses

Bank Indonesia is expected to keep borrowing costs unchanged this month.

Gains in the US dollar and Treasury yields have weighed on fund inflows and emerging-market currencies, DBS analysts said, adding that the rupiah had not been immune from this selling pressure.

“Against this backdrop, the bias for policymakers will be to preserve rate differentials and keep rates on hold,” DBS said in reference to Bank Indonesia’s policy meeting.

Asian shares were mostly upbeat, although investors weighed chances of slow interest rate cuts in the United States.

Samsung Electronics stood out, gaining up to 7.5% after South Korea’s biggest firm announced a surprise stock buyback plan late on Friday. The country’s stock market gained as much as 2.6%.

Equity markets in Malaysia and the Philippines climbed 0.7% and 0.9%, respectively, taking a lead from the broad moves in South Korea.