April 24, Mr. Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank, revealed that the baht opened this morning at 36.93 baht per dollar. “Appreciated” from the previous day’s closing level of 37.07 baht per dollar. Looking at the baht today It is expected to be at the level of 36.80-37.05 baht per dollar.
Since the night before The value of the baht turned around and strengthened. (Oscillating in the range of 36.87-37.07 baht per dollar) supported by the continued depreciation of the dollar. After the PMI index report for the US manufacturing and service sectors surveyed by S&P Global in April came out worse than expected. It reflects that the US economy It may not be as strong as the market estimates. This makes market players come back and increase the chance that the Fed will cut interest rates twice this year.
In addition, the baht was supported by gold profit-taking flows. After the price of gold rebounded to around +30 dollars per ounce. This follows the weakening of the dollar and the slight decline in the US 10-year bond yield. However, the baht has not been able to continue to strengthen much. This is because most market players are waiting for the baht to strengthen to gradually buy. or increasing the position of Short THB (watching the baht depreciate), especially on the side of foreign players After foreign analysts revised their forecasts for the baht to weaken to the level of 37.50-38 baht per dollar in the 2nd-3rd quarters.
Players in the US stock market Move forward and embrace more risk. This is in line with concerns about the Fed interest rate trend that has eased somewhat. According to the PMI Index report, the manufacturing and service sectors came out lower than expected. At the same time, many listed companies gradually announced better-than-expected profits. This has caused market players to start buying US stocks again after facing selling pressure in the past. As a result, the overall S&P500 index closed the market around +1.20%.
On the European stock market side, the STOXX600 index continued to rise +1.09%, supported by a strong rebound of tech stocks and growth style stocks such as SAP +5.3%, Hermes +2.0%, following hopes of a gradual reduction in interest rates. of the European Central Bank (ECB). At the same time, market players are somewhat relieved about the Fed interest rate trend. Moreover, European stock markets are also supported by earnings reports of most European listed companies that are still better than expected.
On the bond market side, the US 10-year bond yield dropped somewhat to 4.60% after market players began to relax about the Fed interest rate outlook. This increases the chance of the Fed cutting interest rates about 2 times this year from the US manufacturing and service sector PMI index report. Most recently, it came out lower than expected. We view that the US 10-year bond yield still tends to fluctuate. Amid the shift in market players’ views on the Fed interest rate trend, however, we still view that the US 10-year bond is interesting in every moment of an uptick. (Emphasis on the strategy of gradually Buy on Dip) with a more worthwhile Risk-Reward.
On the currency market side The dollar turned to weaken. Compared to most major currencies Amid the US stock market’s exposure to risks, the dollar was also pressured by the latest US PMI index report that came out lower than expected. Contrary to the PMI index reports of major economies. This caused the dollar index (DXY) to shrink to the zone of 105.7 points (oscillating within the range of 105.6-106.2 points).
In terms of the price of gold Some declines in both the US 10-year bond yield and the dollar. Following concerns about the Fed interest rate trend decreasing somewhat It has helped support the price of gold (COMEX gold contract for delivery in June) to rebound to the price zone of 2,330 dollars per ounce again. This rebound of the gold price said It has given some market players the opportunity to gradually sell gold for a profit. And the flow of gold purchasing transactions also helped the baht strengthen last night.
For today, market players will be waiting to assess the economic outlook for the Eurozone. Through the report on the business confidence index by Ifo (IFO Business Climate) of Germany and the Eurozone in April. As well as waiting to keep an eye on statements from European Central Bank (ECB) officials to assess the trend of the ECB’s monetary policy, market players are confident that the ECB will begin to gradually reduce interest rates starting from this June meeting.
As for the Asian side Market players will wait to see the results of the Central Bank of Indonesia (BI) meeting. Although the market estimates that BI may maintain the policy interest rate at 6.00%, there is a risk that BI may raise interest rates by +25bps to help support. and maintain stability in the value of the rupiah (IDR).
For the Thai side Market players will be keeping an eye on the Bank of Thailand’s (BoT) Monetary Policy Forum seminar to watch for signals on the BoT’s monetary policy trends and in addition to the aforementioned economic data reports. Market players will be keeping an eye on the earnings reports of listed companies. This may have quite an impact on the financial market atmosphere during this period.
While the trend of the baht value We evaluate that The baht’s reversal of appreciation last night. This may help slow down the momentum of the baht’s depreciation to some extent. Moreover, we expect that market players may not be in a hurry to adjust their currency holding positions during this period in anticipation of important US economic data reports, including GDP in the first quarter of the year. this And important highlights such as PCE inflation as well as earnings reports of big tech stocks, which may affect the atmosphere in the financial market and the direction of the dollar, causing the dollar to fluctuate sideways for the time being.
However, the baht will continue to face additional depreciating pressure. From the transaction flow pays dividends to foreign investors. Makes us see that The baht has not been able to easily return to strengthening. and evaluate that The support zone for the baht may be in the range of 36.80-36.85 baht per dollar, while the zone 37.00-37.10 baht per dollar. It will be a resistance zone during this period. Until the market recognizes additional new factors.
However, one should be careful of fluctuations in the currency market. During the period the market gradually became aware of the announcement regarding the views of the Bank of Thailand. on the economic outlook and monetary policy implementation at the Monetary Policy Forum seminar after market players began to think that the BoT might not reduce interest rates this year, but if there was a signal that the BoT could still gradually You can reduce interest this year. This may be a factor that causes the baht to depreciate somewhat.
However, we still view 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. Especially if the yen weakens past the 155 yen per dollar zone.
In addition, 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.
Tags: baht touched baht financial market began BoT reducing interest rates year Daily News
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