Baht falls most in 3 weeks

Thailand's baht fell by the most in almost three weeks as United States data supported odds that the Federal Reserve will keep trimming monetary stimulus, while a slide in China's exports raised concern about regional growth.

The baht weakened for a third day after a report late last week showed US employers added 175,000 workers in February, the most in three months and more than the 149,000 median forecast in a Bloomberg survey. Exports from China, Thailand’s biggest overseas market, unexpectedly decreased 18% in February, the largest decline since 2009.

"The US data reaffirms the Fed will continue to taper, weighing on the baht," said Disawat Tiaowvanich, a currency trader at Bangkok Bank Pcl. "The bad data from China raised concern about regional exports. In addition, we have speculation of Japanese repatriation" of funds before the March 31 year-end, putting pressure on the baht, he said.

The baht fell 0.3%, the biggest loss since Feb 18, to 32.390 per US dollar as of 9.06am  in Bangkok, according to data compiled by Bloomberg. The currency may trade between 32.35 and 32.75 this week, Mr Disawat said.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose three basis points, or 0.03 percentage point, to 6.6%.

The Bank of Thailand (BoT) will lower its benchmark interest rate to 2% from 2.25% on March 12, according to 16 of 25 economists surveyed by Bloomberg. The rest forecast no change.

Government bonds declined. The yield on the 3.125% notes due December 2015 rose one basis point to 2.26%, data compiled by Bloomberg show. The securities completed a fourth weekly gain on March 7.

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