Mr. Poon Panitchpibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank, revealed that the baht value today The baht opened this morning at 37.08 baht per dollar. “Weakened slightly” from the previous day’s closing level of 37.02 baht per dollar. Looking at the baht today It is expected to be at the level of 36.95-37.20 baht per dollar.
Since the night before The value of the baht gradually depreciated. From the afternoon of the previous day (Oscillating in the range of 36.87-37.11 baht per dollar) Pressurized by the reversal of some appreciation of the dollar. and the rebound of the US 10-year bond yield, with the above picture still putting pressure on The price of gold has dropped into the zone of 2,320-2,330 dollars per ounce, giving some players in the market an opportunity to gradually buy gold in the period of decline. And the flow of such gold purchasing transactions also contributes to pressure on the baht’s volatility to depreciate.
Additionally, we continue to see strong dollar buying from market players. Waiting for the moment to increase the Short THB status of foreign players Including the transaction flow paying dividends to foreign investors. As a result, the baht cannot continue to strengthen. and turned around and gradually depreciated
For the trend of the baht value We evaluate that The momentum of the baht’s depreciation has gained strength once again. following the rebound of the dollar The dollar may continue to strengthen. (along with an increase in the US 10-year bond yield) if US economic data is reported Came out better than expected Until causing market players to worry about the Fed interest rate trend. and began to see that The Fed has the opportunity to cut interest rates only 1 time or less. In which case The baht may also be pressured by the flow of gold buying transactions. If the price of gold continues to decline
In addition, the baht still faces pressure from the flow of transactions paying dividends to foreign investors, causing the baht to be at risk of fluctuating and weakening to test the zone of 37.15-37.25 baht per dollar. However, we must keep an eye on fund flows. Foreign investment whether it will gradually purchase additional Thai assets or not Because if foreign investors continue to gradually purchase Thai assets It may help slow down the depreciation of the baht to some extent. In addition, some market players may wait to gradually sell dollars. Or take profit from short THB positions during the said resistance zone as well.
Moreover, we still consider that Market players still need to be vigilant and monitor the risk that the Japanese authorities will intervene in the currency market. To encourage the Japanese Yen (JPY) to turn around and strengthen. After the yen has weakened past the 155 yen per dollar zone, we think that the Japanese authorities may be waiting for the moment when the momentum of the dollar’s appreciation begins to fade clearly. You may need to see reports on US economic data. that continues to slow down causing market players to relax about the outlook for Fed interest rates and began to return to predicting more interest rate cuts from the Fed about 2-3 times this year.
We view that the baht is still highly volatile. Amid the changes in factors affecting the direction of the baht’s value. As a result, market players should use a variety of strategies to close risks. Either using tools like Options or local currency. This will increase efficiency in closing exchange rate risk.
Players in the US stock market They began to be more careful. Waiting for the earnings report of big tech stocks and important US economic data reports. Remaining this week, both GDP for the first quarter of 2024 and PCE inflation make it even though overall earnings reports from listed companies are beginning to come out better than expected and have a positive effect on some stocks, such as Texas Instrument +5.6%, but The S&P500 index closed the market at just +0.02%.
On the European stock market side, the STOXX600 Index turned around and fell -0.43% amid concerns about the performance of banks. That pressured all banking stocks to decline, such as UBS -2.9%. However, European stock markets still received some support. from the rise of tech stocks such as Semiconductor stocks Following the hope of a bright earnings trend
On the bond market side, the US 10-year bond yield rebounded to 4.64% after market players were waiting for the report of important US economic data, including GDP in the first quarter of this year and PCE inflation rate. If economic data is reported such Came out better than expected It will make market players more worried about the Fed interest rate trend, resulting in the US 10-year bond yield having a higher chance of higher volatility and testing the 4.70% zone without difficulty. However, we still view that the US 10-year bond is more likely. Interested in every moment of improvement. (Emphasis on the strategy of gradually Buy on Dip) with a more worthwhile Risk-Reward.
On the currency market side The dollar rebounded and strengthened. Compared to most major currencies After market players began to become more cautious. In anticipation of important US economic data reports, the Japanese Yen (JPY) also fluctuated, depreciating through the 155 yen per dollar zone. Supporting the dollar to strengthen somewhat Overall, the Dollar Index (DXY) rebounded to the zone of 105.8 points (oscillating in the range of 105.7-105.9 points). As for the price of gold. The pace of the upward movement of both the dollar and the US 10-year bond yield has put pressure on the price of gold (the COMEX gold contract for delivery in June) has not been able to continue to rise. and still oscillates around the zone of 2,330 dollars per ounce. Causing some market players to gradually buy gold during the correction period. and the transaction flow for purchasing such gold This also contributed to pressure on the baht’s volatility to depreciate last night. We estimate that If the price of gold can rise to around 30 dollars per ounce. It may give players in the market an opportunity to gradually sell to make some profit. This transaction flow may help slow down the depreciation of the baht.
For today, the important highlights will be Report on the growth rate of the US economy In the first quarter of 2024, if the economy continues to expand stronger and better than expected. This may cause market players to remain concerned about the Fed interest rate trend. As a result, the dollar and the US 10-year bond yield can continue to rise.
On the European side Market players will be keeping an eye on the statements of European Central Bank (ECB) officials to assess the outlook for the ECB’s monetary policy. Market players are confident that the ECB will begin gradually reducing interest rates starting from this June meeting.
In addition to the aforementioned economic data reports Market players will be keeping an eye on the earnings reports of listed companies. Especially the big tech stocks, including Microsoft, Alphabet, and Intel, which may have quite an impact on the financial market atmosphere during this period.
