Kasikornbank Public Company Limited or KBANK anticipates the movement of the baht for the upcoming week (July 29 – August 2, 2024) to be within the range of 35.85-36.50 baht per dollar, following the domestic market close on July 26 at 36.05 baht per dollar.
At the start of last week, the baht strengthened in response to rising global gold prices and maintained its upward trend throughout the week, supported by net purchases of Thai bonds by foreign investors and a stronger yen, which was bolstered by expectations of a potential tightening of monetary policy by the Bank of Japan (BOJ) during its meeting on July 30-31.
The sentiment towards the dollar throughout the week was influenced by speculation that although the Federal Reserve (Fed) may keep its monetary policy unchanged at the upcoming meeting on July 30-31, it is likely to consider interest rate cuts at the subsequent FOMC meeting in September.
Regarding the investment activity of foreign investors from July 22-26, 2024, they net bought Thai bonds and stocks valued at 20,442 million baht and 85.5 million baht, respectively.
Key factors to observe next week include the outcomes of the FOMC (July 30-31), BOJ (July 30-31), and the Bank of England (BoE) meeting on August 1, along with trends in foreign capital, the economic report for June, and salary details from the Bank of Thailand (BOT), as well as matters relating to the U.S. presidential election.
Important U.S. economic indicators to watch include job openings and labor turnover, pending home sales for June, the consumer sentiment index, private employment figures, ISM, and manufacturing PMI, as well as nonfarm payrolls and the unemployment rate for July.
Additionally, the market is awaiting the Eurozone’s Q2/2024 GDP figures and China’s manufacturing and service sector PMIs for July.
The Latest Insights on Baht Movement: July 29 – August 2, 2024
Kasikornbank Public Company Limited (KBANK) has outlined its projections for the Thai baht’s status against the dollar for the upcoming week, predicting a range of 35.85 – 36.50 baht/dollar. This estimation follows a recent close of 36.05 baht/dollar as of July 26, 2024.
Overview of Baht Performance
At the beginning of the last week, the baht demonstrated a strengthening trend, largely correlating with the rise in global gold prices. This upward trajectory was sustained thanks to significant purchases of Thai bonds by foreign investors and a rally in the Japanese yen, particularly in anticipation of a potential tightening of monetary policy by the Bank of Japan (BOJ) during its meeting scheduled for July 30-31.
Factors Influencing Baht Movement
U.S. Federal Reserve Sentiment
The perception around the U.S. dollar has faced downward pressure due to ongoing speculation concerning the Federal Reserve (Fed). Investors are anticipating that the Fed will maintain its current monetary policy during its upcoming meeting, but may consider cutting interest rates in the subsequent FOMC meeting in September.
Foreign Investment Activities
Between July 22 and July 26, 2024, foreign investors showed a positive disposition towards Thai markets, recording net purchases of:
| Asset Class | Net Purchases (Million Baht) |
|---|---|
| Thai Bonds | 20,442 |
| Thai Stocks | 85.5 |
Key Upcoming Events and Economic Indicators
As we look toward the week ahead, several critical events and economic indicators will influence foreign capital flows and market sentiment:
- The outcomes of the FOMC meeting (July 30-31)
- Decisions from the Bank of Japan (July 30-31)
- The Bank of England’s monetary policy announcement (August 1)
- Investment directives from the Bank of Thailand (BOT)
- Developments regarding the U.S. presidential election
Important U.S. Economic Reports to Note
The following key economic figures from the U.S. are anticipated, which could affect the market sentiment:
- Job openings and labor turnover
- Pendings home sales for June
- Consumer sentiment index
- Private employment data
- ISM manufacturing and PMI data
- Nonfarm payrolls and unemployment rate for July
Global Economic Indicators
Furthermore, the market is waiting for the following critical data:
- Eurozone’s Q2/2024 GDP figures
- China’s July manufacturing and service sector PMIs
Market Insights and Practical Tips
Investing in Thai Markets
For investors considering entry into the Thai market, particularly with regard to currency movements, here are a few practical tips:
- Monitor central bank announcements closely, as they can drastically impact exchange rates.
- Stay informed about global economic trends and how they influence investor sentiment in Thailand.
- Consider diversifying your investments to mitigate risks associated with currency fluctuations.
- Utilize economic calendars to prepare for key report releases that might affect market dynamics.
Case Study: Recent Trends in the Baht
Throughout the last month, KBANK has consistently observed how international market dynamics and domestic factors converge to influence the baht’s value. For instance, the correlation between gold prices and the baht’s strength highlights how commodities can also drive currency valuation.
Conclusion
In summary, the Thai baht’s performance in the coming week will be shaped by various local and international factors. With ongoing developments regarding major central banks and significant economic reports on the horizon, stakeholders are encouraged to remain vigilant and responsive to market changes.
