Stock Dimension:​ Evaluating the Baht’s ⁣Movement This Week

Bank of Ayudhya Public Company Limited Global ⁤Markets Group evaluates the⁢ baht’s movement this week, expecting a trend within ⁢the framework of ⁢32.75-33.50 baht/dollar. The baht closed stronger at​ 33.03 baht/dollar after trading ​in⁢ the range of 33.02-33.52⁤ baht/dollar last week, hitting its strongest level⁣ in‍ 19 months.

The dollar‌ weakened against most major currencies except the yen ‌and Swiss franc⁣ last week after the ‍Federal Reserve decided ⁤to cut interest rates ⁣by 50bp to 4.75-5.00%.⁢ This marks the first​ rate cut, indicating the Fed’s growing confidence ⁢that‍ inflation will ‍slow to its ‌target. ⁤However, the chairman of the Fed stated‍ that he does not see any‍ immediate⁣ signs that the US ​economy⁤ is likely to go into recession.

The Bank of Japan (BOJ) kept interest rates at 0.25% as⁣ expected, while the ‍market ‌interpreted signals from the BOJ that they were in no rush to raise interest rates yet. Foreign investors⁤ bought Thai stocks⁤ and bonds for⁤ a net amount of 5,865 million baht ⁤and 9,975 million baht, respectively.

Krungsri Global⁤ Markets Group’s Market Commentary

Krungsri Global⁣ Markets Group comments on this⁣ week’s ‌market situation, stating that investors will ‌follow comments ⁣from Fed⁣ officials and August US PCE inflation ⁤to further assess ​the direction of US⁤ policy interest‌ rates. The latest ​Fed estimates reflect that the ⁢Fed could cut interest⁣ rates‍ another 50bp to 4.25-4.50% at the end⁤ of this ​year, 100bp in 2025,‍ and another⁤ 50bp in 2026 ⁢to 2.75-3.00%,⁤ which would ⁢mark the bottom ‌of the ‌cycle.

Meanwhile,‌ the market expects the Fed interest rate to reach 2.85% at the end of ​2025, which is ⁣a year faster than⁤ the Fed’s dot plot, indicating that the dollar may have‍ some opportunity to recover if economic data ‌comes‌ out better ​than expected. Additionally, the price of gold in the⁤ world market will continue to create ⁣fluctuations ‍in the value of the baht.

Domestic⁤ Matters

The Governor of the​ Bank⁤ of Thailand stated that Thailand⁢ does not need to reduce policy‍ interest rates⁢ in line with the United ⁤States, as it will mainly consider domestic economic factors. The general picture from different aspects is⁤ still consistent with ⁢that assessed by ‍the ‍BoT. However, ⁣the Governor ⁣acknowledged that ‍credit quality ⁢was‍ at greater risk amid​ an uneven recovery across economic sectors.

The strengthening baht will affect the profits ​of the business sector. We‍ believe that the Monetary Policy Committee (MPC) is likely ‍to keep the policy⁢ rate at 2.50%‍ in its next⁤ meeting on 16 ⁤October.