Coup talk in Thailand sinks baht to lowest level since 2010

Thailand’s baht fell to the weakest level since June 2010 in offshore trading on concern political turmoil will worsen after the nation’s army chief refused to rule out a coup following deadly street protests.

The baht dropped 0.3 percent to 32.95 per dollar, and earlier touched 32.96, the lowest level since June 2010. The currency has lost 7.2 percent this year, its worst annual performance since 2000. Onshore financial markets are closed for holidays through Jan. 1.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell two basis points, or 0.02 percentage point, to 6.56 percent. The measure has risen 75 basis points since Oct. 31, when Yingluck’s opponents began street demonstrations.

“The baht can still depreciate further because it doesn’t seem like the political problems will be going away anytime soon,” says a head of regional foreign-exchange and interest-rate trading.

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