Thai Baht Strengthens to 19-Month High Amid Gold Exports and Foreign Investment

InfoQuest News Agency (13 Sep ’24)

A money manager from Bank of Ayudhya revealed that the Thai baht closed at 33.31 baht per dollar, continuing its upward trend from the market opening at 33.37 baht per dollar. The baht fluctuated within a range of 33.25-33.43 baht per dollar, reaching its strongest level in 19 months at 33.25 baht per dollar due to pressure from gold exports.

Foreign investors purchased Thai bonds for a net amount of 1.7 billion baht, contributing to the baht’s strengthening. “Today, the baht led regional currencies, with transactions involving gold supporting its value to some extent,” said the money manager. The market is eagerly awaiting the outcome of the Federal Reserve (Fed) meeting next week, which is expected to initiate a reducing cycle of interest rates by at least 0.25%.

The money manager estimated the baht’s movement on Monday to be within the range of 33.25-33.45 baht per dollar. The SET Index closed at 1,424.39 points, an increase of 2.81 points or 0.20%, with a trading value of 53,803.23 million baht. Foreign net purchases reached 1,782.29 million baht (SET + MAI).

The Permanent Secretary of the Treasury expressed optimism about the Thai economy, predicting growth of up to 3% in the 4th quarter of 2024. This growth is expected to be driven by investment in the Vayupak Mutual Fund 1, which starts operations on October 1, and funds from the 2025 budget, which begins on the same day.

The Bank of Thailand (BoT) is closely monitoring the situation, as the baht’s significant strengthening may impact the business sector. The main factors contributing to the dollar’s depreciation include the Fed’s interest rate reduction, the increase in global gold prices, and Japan’s industrial production growth.

Japan’s Ministry of Economy, Trade and Industry reported a 3.1% month-on-month increase in industrial production in July 2024, with a manufacturing index of 103.1. The French National Statistics Office (INSEE) reported a 2.2% year-on-year increase in France’s consumer price index in August 2024, consistent with preliminary estimates.

The European Statistical Office (Eurostat) reported a 0.3% month-on-month decline in industrial production in the Eurozone in July 2024, following a stable growth of 0% in June. President Vladimir Putin warned that Western countries should be prepared to fight Russia directly if Ukraine were allowed to attack Russian territory with long-range missiles manufactured in Western countries.

Tonight, the United States will report important economic data, including August import and export prices and the Consumer Sentiment Index for September.

By Thanawat Sueayam/Kasamaphon Kitti Relationship