2023-06-22 03:57:00
Thursday 22 June 2023, 10.57 a.m.
The baht opened this morning at 34.79 baht per dollar, “appreciating”.
The baht opened this morning at 34.79 baht per dollar, “appreciating” from the previous day’s close at 34.84 baht per dollar. by the night before Thai baht depreciated Retest the resistance zone of 34.90 baht per dollar, following the appreciation of the dollar and the flow of buying gold, when it shrinks near support. Before the dollar turns back to weaken. after the market sees Fed Chair Jerome Powell’s speech was not much different from what was said during the Fed meeting.
US stock market Still in a closed position. pressured by selling pressure on tech stocks and growth-style stocks (Tesla -5.5%, Alphabet -2.1%) after market players still believe that The Fed has the opportunity to continue raising the policy rate. From the Fed Chairman’s statement to Congress that continues to reiterate its position. moving forward to raise interest rates to control inflation As a result, the Nasdaq tech stock index fell -1.21%, while the S&P500 closed -0.52%.
In European stock markets, the stoxx600 index continued to fall -0.50% as market players worried that Major central banks, especially the Bank of England (BOE), may continue to raise interest rates. From reports that inflation rates are still at a very high level. which such concerns have pressured Tech stocks and growth-style stocks on the European side dropped. The same was true for the US side (Adyen -1.7%, ASML -1.6%). However, European stocks still received some support from energy stocks (BP +2.2%, Shell +1.8%) following the rebound in prices. crude oil
in the currency market The dollar has weakened against major currencies, with the dollar index (DXY) recently falling near 102 points after market players assessed that The Fed Chairman’s speech to Congress is not dissimilar from his post-Fed speech. Because the Fed chairman continues to emphasize the stance of raising interest rates. to control inflation The market has already learned a lot about this point of view. in the gold price side Although the price of gold has a moment to adjust to test the support zone. But the decline in both the dollar and the US 10-year bond yield after the market gradually took note of the Fed chairman’s statement. Has helped support the price of gold (Gold Contract, COMEX market, delivery in August) to rebound up to the zone of 1,940-1,950 dollars per ounce again, which we believe that some players may gradually take profits in the reba. of gold And such transaction flows contributed to the appreciation of the baht last night.
For today, the main highlight will be the result of the Bank of England (BOE) meeting, where we estimate that May’s high CPI inflation of 8.7% (higher than market expectation and accelerating inflation) will lead the BOE to raise interest rates +25bps to 4.75%, signaling a clear rise in inflation. Continued interest rate hikes are still necessary. (Market players expect the BOE to raise interest rates to 5.75%)
In addition, in the economic data report section Market players will wait for the US Initial & Continuing Jobless Claims report to assess labor market trends. and keep an eye on the statements of Fed officials Specifically, the Fed Chairman’s speech to Congress on the 2nd day.
for the trend of the baht We estimate that The baht has a chance to depreciate slightly, but we still see that The baht may not easily weaken through the resistance zone of 34.80-34.90 baht per dollar as market players wait for the baht to weaken. To gradually take profit short positions THB and sell dollars. for some exporters
In addition, around 6:00 p.m. in the evening, the baht has a chance to gradually appreciate if the BOE decides to raise interest rates as expected. Ready to send a clear signal that Ready to continue to raise interest rates several times until the inflation problem can be successfully controlled which such images will help support the British Pound (GBP) gradually appreciating pressure to depreciate the dollar to some extent, but the baht may not appreciate much We estimate that Short-term support may be in the zone of 34.60-34.70 baht per dollar. Amid market players buying the dollar Especially the importers who will gradually start buying dollars. for end of month transactions Including the buying pressure of the Japanese Yen (JPY) which continued to depreciate during this period.
In addition, foreign investors’ fund flow direction may start to be net sellers. especially on the stock side after the Thai stock index continued to decline Due to the rebound in the previous period, however, foreign investors may gradually return to buy more Thai bonds. After the bond yield has improved somewhat in the past. And we are starting to see more foreign investors returning to buy Thai bonds.
We recommend that During the period of high volatility in the financial market due to both Thai political factors and changes in market players’ views on the trend of Fed policy interest rates. Entrepreneurs should use a variety of hedging tools such as options to increase efficiency in hedging against exchange rate risk.
Look at the baht frame today. expected to be at the level of 34.70-34.90 baht / dollar
Mr. Poon Panichphiboon
Money Market Strategist, Capital Market, Krungthai GLOBAL MARKETS, Krung Thai Bank
1687410076
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