The Thai baht strengthened significantly this week, trading between 31.00 to 31.85 against the US dollar, as global markets reacted to geopolitical tensions following a US military incursion into Venezuela. The move triggered a surge in gold prices and spurred capital inflows into Thailand’s financial markets, the Bangkok Post reported.

Thailand Tightens Reporting on Non-Resident Cash Inflows to Manage Baht

Kanjana Chockpisansin, head of research at Kasikorn Research Center, reported that foreign investors purchased 1.4 billion baht in Thai bonds by midday. The Stock Exchange of Thailand also saw robust foreign interest, with the index climbing 1.8% to 1,282 points. “The gold price surge, influenced by US military operations in Venezuela, boosted the baht from 31.55 to 31.30 against the dollar,” she noted.

Analysts highlight that appreciation pressure on the baht remains strong amid growing expectations that the US Federal Reserve may cut interest rates in 2026. Market consensus currently anticipates up to two rate reductions, though Kasikornbank speculates there could be three, potentially driving the baht toward 30 per dollar later this year.

A United States military move in Venezuela could push global oil prices lower while keeping the Thai baht under pressure, economists say. Abundant oil supply may limit price rises, but rising geopolitical tensions could complicate trade, energy planning and economic diplomacy for… pic.twitter.com/08RnI3jXjz

— Bangkok Post (@BangkokPostNews) January 6, 2026

Poon Panitchpibun, a markets strategist at Krungthai Global Markets, warned of increased money market volatility due to geopolitical risks linked to the US incursion. Krungthai Bank forecasts the baht to trade between 31.15 and 31.85 per dollar this week. Since late December, the currency has experienced notable volatility, influenced by fluctuations in gold prices and broader geopolitical uncertainty.

Thai Baht Hits Four-Year High, Intensifying Pressure on Central Bank

These developments, particularly the evolving US-Venezuela situation, are expected to impact the US dollar and global commodity prices, including gold and oil. “Geopolitical risks following the US move in Venezuela may remain elevated, especially affecting oil prices if the US expands its influence over Venezuela’s political and energy sectors,” Mr. Poon added.

-Thailand News (TN)