Global Markets Group Bank of Ayudhya (BAY) revealed its view on the direction of the baht this week. It tends to move in a frame of 36.70-37.35 baht / dollar compared to the previous week. The baht closed lower at 36.92 baht/dollar after trading in a range of 36.25-37.10 baht/dollar, with the baht hitting its lowest level in more than 15 years after the US reported inflation above r expected and the yuan depreciated beyond 7.0 The big fall in gold prices in the world market increased the demand for imports from domestic gold traders. The dollar strengthened against all major currencies in the past week. The yen slipped to its lowest level in 24 years before dipping into negative territory as Japan said it may take measures to curb its weakening.
However, the dollar outlook was boosted by a rise in US Treasury yields after data showed the US Consumer Price Index (CPI) rose 8.3% yoy in August, albeit slowing from 8.5% in July. The core CPI, excluding food and energy, rose 6.3 per cent in August, accelerating from 5.9 per cent in July. Reinforcing that inflation is still very far from the Federal Reserve’s (Fed) target of 2%, and interest rate futures canceled out the view that the Fed is close to slowing interest rates altogether Foreign investors sold Thai stocks net 4,998 million baht, but bought bonds 678 million baht
The Global Markets Group sees the main event at the September 20-21 Fed meeting, where it is expected to raise interest rates by another 75bp from 2.25-2.50%, and markets will be keeping an eye on interest rate estimates from Fed officials (dot plot ) and assess economic trends and inflation, which will affect the direction of the currency in the next few months.
Investors will also pay attention to the Bank of Japan (BOJ) meeting, which is expected to keep its policy unchanged on September 22, amid the BOJ’s recent assessment that inflation in Japan has been caused by On the cost side, it has not the BOJ much preferred despite the global tightening of monetary policy. The Bank of England (BOE) is likely to raise interest rates by at least 50bp at this week’s meeting.
for domestic factors The Bank of Thailand (BOT) said the baht fluctuated more due to foreign factors. and monitor the situation closely We see that the baht will be under pressure from Fed policy for a while. The official treatment on the market reflects efforts to curb volatility, but it fails to withstand the mainstream world as has happened with the BOJ and other central banks.
By InfoQuest News Agency (September 19, 65)
Tags: BAE , money , Thai baht , Bank of Ayudhya