2023-08-07 08:36:00
Global Markets Group Bank of Ayudhya Public Company Limited (BAY) has a view on the direction of the baht this week that The baht this week tends to move within a range of 34.30-35.00 baht/dollar compared to last week. The baht closed at 34.74 baht/dollar after trading in the range of 34.18-34.79 baht/dollar, with the baht touching its weakest level in three weeks. The Monetary Policy Committee (MPC) raised the policy rate by 25bp to 2.25. % As expected, the dollar strengthened against all major currencies last week. This was driven by US private employment data. brighter than expected The Atlanta Fed’s GDPNow model estimates that US GDP could grow 3.9% this quarter despite the Fed’s aggressive rate hike since March. Downgraded the US credit rating from AAA to AA+, depressing risky assets globally and supporting the dollar as a safe-haven currency.
Meanwhile, global long-term bond yields surged after the Bank of Japan (BOJ) tightened yield curve control measures last week and the US government’s increased borrowing plans. The Bank of England (BOE) raised interest rates by 25bp to a 15-year high of 5.25%, warning that interest rates could remain high for some time amid high inflation. Foreign investors sold stocks and bonds. net Thai Baht 7,790 million and 23,775 million respectively
for an overview this week. The Global Markets Krungsri Group stated that the market would pay attention to monthly inflation data. US July to continue assessing the direction of the Fed interest rate after the position of non-farm payrolls was lower than expected But wage growth remains strong. Krungsri views that increased exchange rate volatility caused by risk aversion may limit selling pressure in the dollar at this stage. Although we reaffirm our view that the dollar is likely to weaken over the next 3-6 months on the assumption that the Fed is ending up and the US economy entering a soft landing.
As for domestic factors, the MPC is expected to raise interest rates unanimously. It was seen that the economy was likely to recover to its potential and that the MPC wanted to maintain policy space for the future, but assessed that economic uncertainty had grown and the policy interest rate was closer to neutral. This supports our view that there is less need for further interest rate hikes. In addition, Krungsri views that the lack of clarity in the political landscape may drag down demand for Thai baht assets at this time.
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