Baht on High Alert: Kasikorn Bank Predicts Volatile Week Ahead, Eyes Thai Export Sales

Kasikorn Bank Predicts Baht Movement for Next Week

The Kasikorn Research Center expects the baht’s value to range from 33.00-33.50 baht/dollar next week (23-27 September 2024). Key factors to watch include foreign capital direction, Thailand’s August export figures, global gold prices, and regional currencies.

Important US economic figures to be released include the PMI index (preliminary), Consumer Confidence Index for September, new home sales, durable goods orders, and inflation measured from the August PCE and Core PCE price index. Additionally, the market awaits GDP figures for the second quarter of 2024 (final) and the number of people applying for weekly unemployment benefits.

Last week (9-13 September), the baht strengthened following the interest cycle down in the United States. Despite negative factors pushing for devaluation, the baht moved in a range with encouragement to strengthen gradually.

The dollar recovered briefly in the middle of the week following a position adjustment after the FOMC meeting on 17-18 September. The Fed voted unanimously to reduce the policy interest rate by 0.50% to a range of 4.75-5.00%, with the baht turning back to strengthen and making a new record of the strongest strength in more than 19 months at 33.03 baht/dollar.

The dollar’s slowdown is attributed to the view that the Fed’s interest rate cut is just the beginning of the interest rate reduction cycle. The trend of US interest rates is expected to continue downward. The baht’s appreciation is also consistent with the increase in global gold prices and a net buying position of Thai bonds by foreign investors.

On Friday, September 20, 2024, the baht closed the domestic market at 33.03 baht/dollar, the strongest level in more than 19 months. Foreign investors continuously bought Thai stocks net at 5,865 million baht and had a net inflow to the Thai bond market of 9,976 million baht.