Thai government bonds rose, pushing the 10-year yield down by the most since July 2012, as better- than-expected U.S. retail data improved risk sentiment amid speculation the Bank of Thailand will cut borrowing costs.
Thailand’s baht fell to an eight- month low and government bonds declined as international investors cut holdings of the nation’s assets amid speculation the Federal Reserve will rein in its monetary stimulus.
Asian currencies had their biggest monthly decline in a year as investors pulled money from regional assets after the Federal Reserve said it could taper its stimulus if the U.S. economy shows sustained improvement.
Thailand’s baht was poised for its biggest monthly decline in a year and government bonds fell as overseas investors reduced holdings of the nation’s debt amid concern policy makers will stem fund inflows.
Thailand’s sovereign bonds advanced on speculation the central bank will bow to government pressure and cut interest rates in an attempt to curb inflows that pushed the baht to a 16-year high last month.
Thailand’s baht jumped the most in 10 months, breaching 29 per dollar for the first time since 1997, as demand for the nation’s bonds rose amid unprecedented monetary easing in Japan. Stocks dropped to a two-month low.
The Thai baht pulled back from a 16-year high as a technical indicator signaled a possible rebound in the dollar and amid concern the central bank will intervene to slow the currency’s gains. Government bonds rose.