Pound Sterling to Thai Baht (GBP/THB) Exchange Rate – Baht forecast to fall beyond a four-year low

The Thai Baht has fallen beyond a four-year low against the Pound and tumbled against the majority of its most traded peers as violence broke out in the Thai capital which led to three deaths.

The unrest caused emerging market currencies to fall as investors grew increasingly concerned that the violence could continue and damage the growth prospects for the Thai economy. Gross domestic product increased 0.6% in the last three months of 2013, the least since the first quarter of 2012, data showed yesterday.

The violence began after Thai police began an operation to clear protestors opposing Prime Minister Yingluck Shinawatra.

The protests have dragged on for months but this week the Thai government announced that it wants all government sites occupied by protestors to be cleared and retaken. Early on Tuesday police moved in to clear Democracy Monument but was met with stiff resistance. In the ensuing skirmish one police officer and two protestors were shot dead. Reports of grenade attacks, bomb blasts and of the police opening fire on civilians has done little to ease worries that the Asian nation is sliding into a potential civil war.

Against the US Dollar the Baht slid to its weakest level in six weeks and the nation’s equity gauge fell 0.9%. As a result of the concerns over Thailand other emerging currencies fell. The South African Rand and Indonesian Rupiah both declined.

The Baht is likely to fall further against Sterling during Tuesday’s session if UK inflation data comes in as forecast. Investors are expecting the inflation rate to remain at the 2% target set by the Bank of England.