by adminbkk 
The baht still has a chance of fluctuating and depreciating further. If foreign investors continue to sell Thai assets But if the market gradually sells to make a profit, gold will rebound. It may help slow down the depreciation or help it to strengthen somewhat.
The baht value opens this morning, 22 Jan. 2024 at the level of 35.54 baht per dollar, “weakened slightly” from the previous week’s closing level of 35.51 baht per dollar.
Mr. Poon Panichphibun Capital Market Strategist Krung Thai Bank stated that Since last Friday The baht moved sideways near the level of 35.50 baht per dollar. (Oscillating within the range of 34.43-35.57 baht per dollar)
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with a weak fluctuation following the appreciation of the dollar After the US Consumer Confidence Index report by the University of Michigan (U of Michigan Consumer Sentiment) came out better than expected.
However, the risk-on condition of the US financial market That encouraged US stock market indexes like the S&P500 Index to rise to new highs. It has helped slow down the appreciation of the dollar. and encourage the baht to gradually strengthen somewhat
This week, we think we should wait for reports on US economic data, such as PCE inflation and PMI index, and prepare to keep an eye on the results of the European Central Bank (ECB) and Bank of Japan (BOJ) meetings.
Global economic perspective
▪ US side – Market players will wait and see. Important US economic data reports such as the Industrial Manufacturing and Services Purchasing Managers’ Index report by S&P (Manufacturing & Services PMIs) in January. Including the first forecast of the economic growth rate in the 4th quarter and important highlights.
Such as the PCE inflation report, which is a measure of inflation that the Fed keeps an eye on. If the US economic data is reported Still came out better than expected. Reflecting the overall economic picture that is still bright. It will cause market players to “stop believing” that the Fed will cut interest rates “quickly and deeply.” According to the latest CME FedWatch Tool, the market gives only a 49% chance that the Fed will cut interest rates at its March meeting.
If such opportunities continue to decrease It will further support both the dollar and US bond yields. rising
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And in addition to the aforementioned economic data report, we view that the atmosphere in the US financial market (including the global financial market) may depend on the performance reports of listed companies.
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Especially large companies such as Netflix, ASML and Tesla. The risk-on atmosphere of the overall financial market may be enough to help slow down the appreciation of the dollar.
▪ European side – Market players will be waiting to assess the economic outlook for the UK and the Eurozone through important economic data reports such as the UK and Eurozone manufacturing and service sector PMIs and the German IFO Business Climate Index. ) If reporting economic data from the Eurozone side Didn’t it come out worse than expected?
Reflecting the trend of a clearer slowdown in economic activity, we expect the European Central Bank (ECB) may decide to maintain its policy interest rate (Deposit Facility Rate) at 4.00%.
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and may signal a reiteration of the ECB’s position that it will not rush to cut interest rates. As the market is expecting, until the ECB is confident that it can successfully control the inflation problem.
This picture may help reduce the depreciating pressure on the Euro (EUR) or help the Euro strengthen to some extent.
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If market players interpret that the ECB has sent a clearer signal. on the trend of reducing interest rates It could easily put more pressure on the volatile euro to depreciate.
▪ Asia side – The main highlight will be the results of the Bank of Japan meeting. (BOJ) We expect the BOJ to maintain the policy interest rate at -0.10% with no changes to the Yield Curve Control measures. However, we will keep an eye on how the BOJ’s view on the economic outlook and inflation will change or whether
Has the BOJ signaled the opportunity to adopt a more stringent monetary policy? Because if the BOJ has not yet sent such a signal or expressed concern about the economic outlook, the BOJ may pressure it. The value of the Japanese Yen (JPY) has continued to weaken from the level of 148 yen per dollar.
We believe that market players will wait to evaluate the direction of the Japanese economy and the BOJ’s monetary policy adjustments from the latest export report and PMI index report for the manufacturing and service sectors.
▪ Thai side – Analysts estimate that Thailand’s international trade is likely to continue to recover. The total exports (Exports) may grow approximately +5.9%y/y, supported by the return to the uptrend of the electronic product cycle and Semiconductor Including agricultural and food exports that are still doing well. As for imports, it will expand +7%y/y mainly in line with the recovery of exports.
As for the trend of the baht value, we consider that The momentum of the baht’s depreciation may slow down somewhat. After market players gradually lowered their expectations for the Fed’s interest rate cut in March, the baht still has a chance to fluctuate and weaken further. If foreign investors continue to sell Thai assets
In addition, you should keep an eye on the direction of gold prices. After the gold price tends to rebound from the support zone. This causes market players to gradually sell to make a profit on the rebound of gold. This will help slow down the depreciation or help the baht strengthen somewhat.
As for the dollar, we believe that factors supporting the dollar’s appreciation still exist. If the US economic data report Came out better than expected causing market players to “stop believing” that the Fed will hurry to cut interest rates Or the results of the ECB and BOJ meetings indicate that the two main central banks may have a more accommodative monetary policy outlook than the Fed. Until causing both the euro (EUR) and the Japanese yen (JPY) to fluctuate and weaken.
We maintain the advice that Market players should choose to use a wider range of exchange rate risk hedging tools. Amid the fluctuation of the baht Including other currencies which was reasonably higher than in the past Market players may choose to use additional tools such as Options or Local Currency along with closing risk through forward contracts.
Looking at the baht value this week at the level of 35.20-35.80 baht/dollar.
Today’s baht frame It is expected to be at the level of 35.45-35.65 baht/dollar.
Kasikorn Research Center stated that the baht adjusted to a level of approximately 35.47-35.49 baht per dollar. This morning (9.22 a.m.) compared to the market closing level late last week at 35.52 baht per dollar.
The baht still fluctuates in a range but has strengthened slightly in line with the movement of some Asian currencies. and signals of net buying of Thai short-term bonds by foreign investors.
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Meanwhile, the dollar lacked support after long-term US bond yields began to decrease And the market shifts its focus back to waiting to follow the BOJ and ECB meetings this week.
For the framework of the movement of the baht today Preliminary assessment is at 35.40-35.60 baht per dollar while important factors that need to be monitored include:
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Signs of foreign capital The direction of gold prices in the world market and the movement of the Yuan After the People’s Bank of China announced that the 1-year and 5-year LPR interest rates would be maintained at 3.45% and 4.20%, respectively.
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