2023-08-23 00:40:00
Mr. Poon Panichphiboon, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank Revealing the value of the baht opened this morning (23 Aug) at a level of 35.02 baht per dollar. slightly depreciated Almost unchanged from the previous day’s closing level of 35.00 baht per dollar. And looking at the baht frame today, it is expected to be at 34.85-35.15 baht / dollar during the night before. The baht fluctuated in the sideway frame (swinging in the range of 34.93-35.12 baht per dollar) following continually appreciating during the market gradually recognizing the results of the vote for the Prime Minister. The baht has a moment to depreciate. During the strength of the dollar following the rise in US bond yields. and the decline in gold prices (It is expected that there will still be a flow of transactions to buy gold in a short period. pressured the baht to depreciate) before the baht turned around to appreciate some After the dollar fell and the price of gold can rebound to some extent
Regarding the trend of the baht, we believe that the momentum of the baht’s appreciation is starting to return once more. Especially following the vote for the Prime Minister is completed, which must be closely watched. How much will foreign investors’ fund flow start to buy Thai assets? According to statistics in the past, it was found that in the period following the election of the Prime Minister and the establishment of a government If foreign investors return to buy Thai stocks net around 3-4 billion baht, there is a chance that the baht will appreciate by regarding +1%. following the direction of US bond yields This may boost the opportunity for foreign investors to gradually purchase more Thai bonds as well. especially long-term bonds And if the baht starts to have a clear direction of appreciation We expect short-term bond fund flows to return to net buys. to reflect the increase in Long THB status of foreign players as well
However, the appreciation of the baht may be slowed by the flow of buying dollars and foreign currencies of some players, such as importers. especially in times when the baht is considerably appreciating compared to other currencies such as the Japanese Yen. In addition, the direction of the dollar may continue to strengthen or stabilize sideways if the US economic data report still looks good And officials are signaling their support for further interest rate hikes. which must wait to follow the Fed chairman’s statement At the Jackson Hole Symposium this Friday closely Incidentally, following the baht turned back to strengthen continuously this week. This makes us assess a new resistance zone around 35.20-35.30 baht per dollar. And the support line for the baht during this period is around the zone of 34.80 baht per dollar.
Richmond Fed President Thomas Barkin’s latest statement came out in support of the Fed’s further interest rate hike. pressured the atmosphere in the US stock market In addition, selling pressure on banking stocks remains in a closed position. In particular, many regional banks that face credit rating downgrades from S&P is another factor that puts pressure on the US stock market. Overall, the Dowjones were down -0.51%, while the S&P 500 closed -0.28%.
In European equities, the stoxx600 rose more than +0.68%, bolstered by stock gains related to China’s economic recovery prospects. both mining and brand name (Rio Tinto +1.3% LVMH +0.8%). Semiconductor (ASML +3.3%) amid hopes that leading US chip maker Nvidia’s budget is strong.
in the bond market The Richmond Fed chairman’s remarks continued to encourage market players to see that the Fed has regarding a 45% chance of continuing to raise interest rates and regarding an 83% chance that the Fed will hold it until next May’s meeting. (Beginning to reduce interest rates in June next year) causing the US 10-year bond yield to rise continuously to reach a new high of 4.37% before the US 10-year bond yield shrinks somewhat. according to the buying pressure of some players in the market As a result, the overall 10-year bond yield in the US is still swinging near 4.32%.
in the currency market The dollar gradually appreciated in line with the rise in long-term US bond yields, but the dollar’s gains remained limited due to market participants taking profits. Overall, the dollar index (DXY) rose slightly to 103.6 points (frame 103.1-103.7 points). Continued rally in both the 10-year bond yield, the US dollar and the dollar. is still a major obstacle that pressures (COMEX gold contract for delivery in December) continues to swing in the range of 1,918-1,928 dollars per ounce. However, we still see efforts to rebound in gold prices. which comes from the buying power of players in the market at the time of contraction or gradually closing profitable short positions of some players The aforementioned gold purchase transaction flow contributes to the pressure of the baht to depreciate. May also start to see gold’s rebound profit-taking flow reversal as well.
Today, the main highlight will be the Manufacturing and Services Purchasing Managers’ Index report. (Manufacturing & Services PMIs) of major economies such as the US, Eurozone, UK and Japan. If the US PMI data report came out better than expected. and reflects the US economy which continues to expand well, may even encourage players in the market to believe that Fed may continue to raise interest rates And there is a chance that the Fed may keep interest rates high for a long time.
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