2024-03-12 01:46:42
The baht opened this morning at 35.40 baht per dollar, stable, unchanged from the previous day’s closing level.
Mr. Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank revealed that The baht value opened this morning. At the level of 35.40 baht per dollar, stable, unchanged from the closing level of the previous day.
Since the previous night, the baht has moved sideways (oscillating in the range of 35.37-35.45 baht per dollar) following the rebound and strengthening of the dollar. That has supported the atmosphere in the US financial markets. which is still in a state of being closed to taking risks Market players are also more cautious before hearing the US CPI inflation report on Tuesday night (7:30 p.m. local time in Thailand).
Incidentally, the baht also faces pressure from transaction flows purchasing dollars and foreign currencies. After the baht has strengthened moderately in the short term As a result, the baht cannot easily strengthen beyond the support zone of 35.30 baht per dollar.
For the trend of the baht value
We evaluate that The baht may fluctuate sideways in the range near 35.40 baht per dollar. in the period before recognition US CPI inflation report because market players are not in a hurry to clearly adjust their holding positions. The baht may also face some downward pressure. Follow the flow of transactions to sell and profit from Long THB positions (viewing the baht to strengthen), including the flow of transactions to buy dollars from some importers. After the baht has strengthened somewhat in the short term
In addition, there may still be some selling pressure on Thai stocks. According to the atmosphere of risk tolerance of the financial market as a whole, however, even though the baht will face some downward pressure, we expect that before the US CPI inflation report is received, the baht may not fluctuate and depreciate past the resistance level of 35.50 baht per month. The dollar goes a long way, except that during the recognition of the British labor market data report around 2:00 p.m., the British pound (GBP) will fluctuate and depreciate heavily.
If the British employment total or wage growth rate It came out much worse than expected. As a result, market players are beginning to estimate that the BOE may cut interest rates faster than in the third quarter, which is the period the market is currently anticipating.
And most importantly, you should be careful of fluctuations when the market gradually receives the US CPI inflation report around 7:30 p.m. because if the US inflation rate It didn’t slow down as expected. (Must keep an eye on both %y/y and %m/m data or monthly change momentum) may cause market players to worry about the Fed’s tendency to cut interest rates, resulting in the dollar and US bond yields. It is not difficult to have the opportunity for higher volatility, putting considerable pressure on both gold and baht prices. There is a chance that the baht will weaken past the resistance level of 35.50 baht per dollar. Go to test the next support zone around 35.65 baht per dollar.
On the other hand, if the US CPI inflation rate slows down as expected or may slow down slightly more than expected. We suspect that this may not help the dollar and the US 10-year bond yield fall much further than current levels. This is because market players have already learned about the Fed’s interest rate cut trend this year about 3-4 times. As a result, the baht may strengthen and remain in the support zone around 35.30 baht per dollar.
We would also like to emphasize that during this period, the volatility of the baht is higher than the historical average. (Looking at the weekly baht frame) clearly causing us to maintain the advice that Entrepreneurs should use a variety of hedging tools, such as Options, to increase efficiency in hedging against exchange rate risk.
And in addition to using the aforementioned tools Choosing to transact in local currency is another interesting way to manage exchange rate risk. Entrepreneurs should compare transaction costs and hedging plans before making every decision.
Looking at the baht today It is expected to be at the level of 35.35-35.50 baht/dollar before the market recognizes the US CPI inflation rate.
and assess the baht range at 35.25-35.65 baht/dollar during the period when the market gradually recognizes the US CPI inflation rate.
World economic perspective
sideUS stock market Still facing pressure from gradually selling to make profits on big tech stocks such as Meta -4.4%, Nvidia -2.0%, as well as other growth style stocks in order to reduce investment portfolio risk. Before receiving the US CPI inflation report on Tuesday night. As a result, the overall Nasdaq tech stock index dropped -0.41%, while the S&P500 index closed the market at -0.11%.
wayEuropean stock market side The STOXX600 index still dropped -0.35% following the selling pressure of large tech stocks and Growth style stocks as well as in the US, led by ASML -4.2%, SAP -1.9%. However, the European stock market still received some support from An increase in stocks in the Defensive group, such as the Healthcare group, such as AstraZeneca +2.5%, Roche +1.6%.
inBond market side Although the atmosphere in the US financial market will be in a state of caution But such concerns come from the issue of US CPI inflation and the direction of the Fed’s policy interest rate, causing the US 10-year bond yield to gradually increase to near 4.10% again.
However, one should be careful of the fluctuations in bond yields. that may turn around and adjust upwards If US CPI inflation does not slow down as the market expects, Or in the worst case CPI inflation has accelerated to the point of “surprising” market players and us.
However, the risk-reward of buying long-term bonds is still worth it. Makes us think that Investors can gradually increase their investment status. Or investors may wait for a Buy on Dip moment as well (may focus on gradually buying in the US 10-year bond yield zone above 4.20%).
sidecurrency market The dollar has strengthened somewhat. This is in line with the risk-taking situation of the US financial market. In addition, market players are cautious and may adjust their holding positions, such as gradually reducing their Long JPY position after the Japanese Yen (JPY) has strengthened quickly and strongly in the previous period. before receiving the CPI inflation report on Tuesday night. As a result, the overall Dollar Index (DXY) continues to oscillate near the level of 102.8 points (oscillating within the range of 102.6-102.9 points).
In the sectiongold price Market players are waiting to learn more new factors, especially the US CPI inflation report, causing the gold price (COMEX gold contract for delivery in April) to continue to fluctuate sideways near the level of 2,180-2,190 dollars per ounce. Incidentally, those Playing in some markets, gradually selling off some gold to make a profit. And such transaction flows also help to encourage the baht to strengthen and reduce depreciating pressure on the baht.
Important highlights for today
An important highlight that market players will be waiting closely for is the US CPI inflation report in February. which market players expect CPI inflation may remain stable at 3.1%, while Core CPI inflation does not include the effects of energy and fresh food. It may slow down slightly to 3.7%, giving the Fed an opportunity to gradually reduce interest rates somewhat this year.
On the European side Market players will wait and see. British labor market data report This may affect the Bank of England’s (BOE) monetary policy decision.
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