Baht Braces for Turbulence: Krungsri Predicts Wild Ride Amid US Election Fallout

November 4, 2024 – Although the dollar strengthened against most major currencies last week, the euro recovered to its strongest level in two weeks after data showed the eurozone economy improved more in the third quarter brighter than expected, reducing expectations for a major interest rate cut by the European Central Bank (ECB). Meanwhile, consumer spending remains strong. The Bank of Japan (BOJ) kept its policy interest rate at 0.25% as expected and continued to expect inflation to stabilize near the 2% target in the next few years Foreign investors sold Thai stocks and bonds net of 9,644 million baht and 4,892 million baht, respectively

For this week’s overview The key event for global markets will be the results of the US presidential election on November 5, while over the past month investors have been bullish on the victory of former President Trump. If Trump wins and the Republicans control the House of Representatives (Red Sweep), the dollar and US bond yields will continue to rise, reflecting the push for policies such as increasing tariffs. and banning illegal immigrants This will create inflationary pressure in the medium term.

However, in the case where Trump wins but there is no Red Sweep, or in the case where Harris wins, the dollar will face pressure that takes profit from the Trump Trade. after the numbers. Autumn hiring is disappointing despite the weather and strike But in general, the economy continues to slow down gradually.

for domestic factors The Bank of Thailand and the Ministry of Finance agree that the 2025 inflation target framework of 1-3% is appropriate and will not hinder economic activities However, the Ministry of Finance wants to see inflation rise to 2% and it is ready for the BoT. Create an agreement to implement policies to support economic growth.