Bank of Ayudhya Anticipates Baht Consolidation
In a recent disclosure to Nation Online, Ms. Rung Sanguanruang, Director of Business Promotion and Global Markets Regulation Department at the Bank of Ayudhya, revealed that the baht is expected to remain within the range of 35.30-36.00 baht per US dollar next week. This projection is contingent upon crucial factors such as the US employment data for June, Federal Reserve meeting minutes, US manufacturing and service sector ISM index figures, as well as the inflation rate in Thailand for the same month. If the US job numbers surpass expectations, it could bolster the dollar’s strength and potentially test the baht’s resistance at 36 baht against the greenback.
Risk Factors Influencing Currency Movements
However, there are three primary risk factors that could impact the projected trend:
- Concerns regarding the US Federal Reserve’s future interest rate hikes.
- The depreciation of the yuan due to the sluggish Chinese economy.
- The political uncertainty in Thailand.
During the past six months (January-June), the Thai baht has displayed relative stability compared to other regional currencies. Its depreciation rate of 2.90% ranks it fourth in the region, trailing behind the Malaysian ringgit (5.87% depreciation), the Chinese yuan (4.90% depreciation), and the South Korean won (4.04% depreciation). Among its peers, the Indonesian rupiah has emerged as the strongest currency, appreciating by 3.84%. In contrast, the Indian Rupee saw a minor depreciation of 0.85%, while the Philippine Peso and the Vietnamese Dong experienced marginal decreases of 0.76% and 0.23%, respectively. Foreign investors have shown a lack of confidence in the Thai market, selling Thai stocks net 109 billion baht and Thai bonds net 83 billion baht since the beginning of the year.
Kasikorn Bank reports project the baht’s movement for the upcoming week (July 3-7) to range from 35 to 35.70 baht per US dollar. Monitoring the inflation rate (CPI) in Thailand for June, along with observing the flow of foreign capital and the domestic political situation, will be crucial in assessing the baht’s trajectory. Additionally, market participants are closely watching key US economic indicators such as non-farm payroll numbers, ADP unemployment rates, PMI and ISM Manufacturing and Services indices for June, as well as factory orders in May. The minutes from the Fed meeting held on June 13-14 and the weekly unemployment benefits figures are also matters of interest. Furthermore, the market is eagerly anticipating the outcomes of the Reserve Bank of Australia’s monetary policy meeting and the June PMI readings for China, the Eurozone, and the UK.
The Bank of Ayudhya expects the baht to move next week within a range of 35.30-36 baht per dollar. Expect US jobs numbers for June – feed minutes If better than expected, support the strong dollar. “Rung” reveals statistics for 6 months, the baht weakens, ranks 4th in the region
Ms. Rung Sanguanruang, Director of Business Promotion and Global Markets Regulation Department of Bank of Ayudhya disclosed that to Nation Online baht next weekmoving within the range of 35.30-36.00 baht per US dollar US June employment track (expected + 200,000 jobs), Federal Reserve or Fed meeting minutes, US manufacturing and service sector ISM index states Inflation in June Thailand, however, if the US numbers are still stronger than expected. The baht has a chance to weaken to test 36 baht against the US dollar.
The risk factor comes from 3 factors:
– Concern that the US Federal Reserve had not finished raising interest rates.
– China’s economy depresses the yuan to depreciate.
– The ambiguity of Thai politics
In terms of currency movements in the region over the past 6 months (January-June), the ringgit-Malaysia was found to have weakened the most by 5.87%, followed by the yuan-China 4.90% – South Korea 4.04% Thai baht-Thai 2.90%
The Taiwan dollar was 1.28%, the Singapore dollar was 1.19%, and the strongest currency was the Indonesian rupiah 3.84%.
Indian Rupee 0.85%, Philippine Peso 0.76% and Vietnamese Dong 0.23%. However, since the beginning of the year, foreigners sold Thai stocks net 109 billion baht and Thai bonds net 83 billion baht.
News reports from Kasikorn Bank inform that the movement of the baht next week (July 3-7) is expected to be at 35 -35.70 baht per US dollar. The important factor to monitor is the inflation rate (CPI) in June in Thailand. Foreign Capital Direction (Flow) Domestic Political Situation and statements from fed officials
Although the key US economic numbers are non-farm payroll numbers. ADP unemployment rate Private Employment Sectors, PMI and ISM Manufacturing and Services for June Factory orders in May Minutes of the Fed meeting held on 13-14 June. and the number of weekly unemployment benefits Markets are also awaiting the outcome of the Reserve Bank of Australia’s monetary policy meeting and the June PMI for China, the Eurozone and the UK.
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