HoonSmart.com >> “Krungsri” expects the baht this week to trade in the range of 36.00-36.85 baht / dollar, hoping for US inflation in August, expected to slow down to 8.0% from 8.5% in July.
Global Markets Group Bank of Ayudhya (BAY) has a view on the direction of the baht this week that This week, the baht tends to move within the range of 36.00-36.85 baht/dollar compared to the previous week. The baht closed higher at 36.32 baht/dollar after trading within a range of 36.27-36.82 baht/dollar. The dollar weakened against most major currencies except the yen last week. Initially, the euro and pound hit their lowest levels in 24 and 37 years, respectively.
However, the dollar turned against several currencies after the European Central Bank (ECB) unanimously voted to raise interest rates by 75bp, a record high. to fight inflation Even the Eurozone faces recession risks and energy allocations in the upcoming winter. The ECB raised its deposit interest rate to 0.75% from 0%, while the ECB chair said it may raise interest rates more than two rounds, but perhaps less than five. The ECB estimates that in 2023 inflation will fall to 5.5% from 8.1% this year.
The Federal Reserve Chair (Fed) said the Fed will continue to raise interest rates until targets to curb inflation. Foreign investors sold net 5,204 million baht in Thai shares but bought 10,980 million baht in bonds.
Global Markets Krungsri Group expects markets to keep an eye on August US inflation data. This is expected to slow to 8.0% from 8.5% in July. The data could weigh on market expectations about Fed interest rates going forward. Investors are expecting an 88% chance that the Fed will raise interest rates another 75bp to 3.00-3.25 percent at its 20-21 meeting. In addition, stronger signals from Japanese authorities about the potential for a yen intervention may lead market participants to be more cautious to continue selling the yen from a 24-year low.
As for domestic factors, the BOT’s governor emphasized that the Thai policy interest rate would gradually increase to suit the economic context in each period. Meanwhile, inflation risks are rising and the economy is in a recovery direction. GDP for 2022 and 2023 is expected to grow by 3% and 4%, respectively.
Meanwhile, the Bank of Thailand will continue to oversee the economic recovery. This stance supports our view that the Monetary Policy Committee (MPC) will raise interest rates in the remaining two sessions of this year and continue through the 1/66th quarter.