Asian currencies fall during holidays: Thai baht drops the most

Emerging Asian currencies fell during low holiday trading today, with the Thai baht falling the most as the US dollar remained strong and economic data from China showed a slight recovery.

Many markets across Asia, including Singapore, Malaysia, Indonesia, the Philippines and India, were closed for holidays, leading to quiet trading sessions.

The Thai baht fell as much as 0.5% on the back of lower gold prices, while the South Korean won and Taiwan dollar saw slight declines.

Analysts noted that the Thai baht's decline was partly due to lower gold prices since Friday. Additionally, Thailand's political instability, including a court case that could result in the ouster of the prime minister, is expected to further impact its assets.

Political uncertainty has already hit investor confidence, making Thailand's currency and stock market one of the worst-performing markets in the region this year, according to ANZ analysts. Despite attractive valuations of Thai stocks and bonds, withdrawals by foreign investors due to political instability could put further pressure on the baht.

The Chinese yuan held steady, but stocks fell about 0.6% as investors digested weaker-than-expected data pointing to ongoing challenges in the property sector.

Globally, investors are looking forward to the release of US retail sales data for May, which will provide insight into when the Federal Reserve may cut interest rates this year.

Recent estimates from the Federal Reserve show that the median forecast among 19 US central bankers suggests a single rate cut this year, according to the Bangkok Post.