From the tension situation in the Middle East This causes commodity prices to fluctuate. Both crude oil prices, gold prices, as well as currencies, especially the Thai baht, which has weakened past 37 baht/US dollar. fell along with other Asian currencies. that has decreased all around From the pressure of the dollar strengthening from the still strong economic figures. This makes the Fed likely to maintain interest rates for a longer period of time.
The value of the baht in the past How much has it weakened? Is it the weakest in Asia? Why? And what will the direction be next? SPOTLIGHT will take a look.
By the value of the baht today (24 Apr.) Since the night before The value of the baht turned around and strengthened. (Oscillating in the range of 36.87-37.07 baht per US dollar Supported by the continued depreciation of the dollar. After reporting the PMI index for the US manufacturing and service sectors
A survey from S&P Global in April found that the results were worse than expected, reflecting 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.
Meanwhile, the baht is still supported by the flow of gold profit-taking. After the price of gold rebounded to around +30 dollars per ounce. Following the weakening of the dollar and the slight decline in the US 10-year bond yield.
Mr. Poon Panitchpibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank, revealed that The baht still cannot continue to appreciate 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.
However, on April 23, the baht weakened to its lowest level in six and a half months, opening at 37.07 baht per US dollar on April 22, falling along with other Asian currencies. that has decreased all around from the pressure of the dollar strengthening from the still strong economic figures. This makes the Fed likely to maintain interest rates for a longer period of time.
in the past week The yen weakened to its lowest level in 34 years, breaking through 154 yen/US dollar. Meanwhile, the value of the Indonesian rupiah dropped to its lowest level since April 2020, surpassing 16,200 rupiah/USD.
Pressure on Asian currencies comes from US economic data. That came out quite well with inflation still at a high level of 3.5% in March 2024, causing investors to think that the Fed may not cut policy interest rates soon from the initial expectation that the Fed would cut interest rates up to 6 times, expected to decrease as early as September
The US dollar also gained support as a safe-haven currency amid concerns over tensions between Israel and Iran. Made from the beginning of the year until now The US Dollar Index has increased nearly 5%.
At present, G7 members including the US, Japan and South Korea have agreed to closely discuss exchange rate movements to prevent excessive fluctuations that affect the Asian economy as a whole. Meanwhile, the Bank of Indonesia sold dollars to support the rupiah. And the Bank of Malaysia has announced and is ready to take measures to support the ringgit.
However, analysts say the situation is not yet so dire that Asian countries would have to work together to support their own currencies, as was the case in the mid-1980s, but the dollar is likely to strengthen further. If the conflict situation in the Middle East worsens Or the US economic numbers came out better than expected.
This week’s US economic figures What you need to keep an eye on is the GDP numbers that will come out on Thursday and Personal Consumption Expenditure (PCE) or the price index from personal consumption expenditures that will come out on Friday. That may affect the Fed’s decision to reduce or maintain interest rates.
Krungsri looks at the currency price range this week. 36.50-37.20 baht/dollar
Ms. Rung Sanguanruang, Senior Director Global Markets Business Promotion Executive Bank of Ayudhya Public Company Limited said to SPOTLIGHT that The baht value range is expected this week to be 36.50-37.20 baht/US dollar. Investors will pay attention to the March PCE inflation numbers in the US. and the results of the Bank of Japan meeting Including tensions in the Middle East, which may increase volatility in crude oil and gold prices.
For the overall picture, weight is still given to the view on the direction of US interest rates. Several key economic data and comments from Fed officials indicate better-than-expected resistance to high interest rates. This has caused the market to adjust its view many times that the Fed will continue to postpone interest rate cuts. Investors expect that the Fed may cut interest rates only 2 times in 2024.
“When do we expect US employment to start showing signs of weakening? The market may adjust its forecast again. And we think there is still a possibility that the Fed will cut interest rates 3-4 times in the second half of this year. which will gradually come back to support the value of the baht.” Miss Rung
The baht weakened, clinging to regional currencies during this period. But it is considered to be at a middle level. Currencies have been pressured to avoid risky assets amid a longer-than-expected trend of high U.S. interest rates. and geopolitical factors
Meanwhile, Kasikorn Bank views the movement of the baht at the level of 36.70-37.20 baht per US dollar. Meanwhile, the Kasikorn Research Center assesses important factors that need to be followed, including March export data. of Thailand, the direction of foreign capital Situation in the Middle East Including movements of Asian currencies and gold prices in the world market.
In addition, the market is still waiting to follow the results of the BOJ meeting, the announcement of the Prime Customer Rate (LPR) by the People’s Bank of China, and the PMI index (preliminary) for April in Japan, the Eurozone, and the United Kingdom.
