The MPC voted unanimously to raise the interest rate by 0.25% to 2.00%.

The MPC voted unanimously to increase the interest rate by 0.25% to 2.00% immediately, suggesting that the Thai economy is likely to grow higher than assessed. part of the government’s economic policy While the baht is still under pressure due to political instability that still has problems in forming a government.

foreign exchange department Bangkok Bank reported that the movement of the foreign exchange market for the period from May 29 – June 2, 2023, the baht opened on Monday (29/5) at 34.82 / 83 baht / US dollar. Depreciated from the closing level on Friday (26/5) at 34.67/69 baht/USD. After the US dollar was supported by the US economic data.

On Friday evening (26/5), the basic Consumer Price Index (CPI) figures were released excluding the food and energy sectors. It rose year on year by 4.7%1 in April. Higher than analyst expectations of 4.5% and an adjustment from March’s level of 4.6%, giving investors the view that the Federal Reserve (Fed) has an opportunity to raise interest rates again.

In addition, durable goods were purchased in April. It rose 1.1% after gaining 3.3% in March. Contrary to analysts’ expectations of a 1% decline, durable goods orders were boosted by aircraft orders. The University of Michigan Consumer Confidence Index fell to 59.2 in May amid concerns about the US debt ceiling.

However, the index came out higher than analysts’ expectations of 57.7. On Tuesday (30 / 5), the US dollar weakened. Because investors have gradually sold the US dollar. Which is considered a safe asset (Safe Haven) out of the market has eased concerns about the lack of the US government. After a news source said Discussions to raise the debt ceiling between President Joe Biden, President of the United States, and Mr. Kevin McCarthy, Speaker of the United States House of Representatives. An agreement was reached to raise the debt ceiling on Saturday (27/5).

The agreement will allow the government to increase the debt ceiling to $31.4 trillion until January 1, 2024. However, this agreement will be voted on again by the House of Representatives on Wednesday, May 31, and the Senedd will consider it by the 5th day of this June

Expected this June The Fed must raise interest rates by 0.25%.

The CME Group’s latest FedWatch tool suggests that 61.9% of analysts give the Fed a 0.25% rate hike at its June 13-14 meeting. During this time also

However, at the end of the week the US Congress passed legislation “Increasing the debt ceiling” was officially successful. As the dollar weakened positively After the market expected the US Federal Reserve (Fed) to maintain interest rates at the June 13-14 meeting.

According to the US Department of Labor, unit labor costs (ULC), one of the Fed’s main gauges of inflation, rose 4.2 percent in the first quarter, slowing from initial estimates of a 6.3 percent expansion.

Some Fed officials also expressed support for holding interest rates at the June meeting, including Philadelphia Fed President Patrick Harker and Philip Jefferson. by Mr Jefferson who said interest rate suspension during the month of June will help the Fed Board to see more data. before deciding on the scope of implementation of the monetary tightening policy.

Investors will keep an eye on the US non-farm payrolls report on Friday (2/6), with jobs expected to add 180,000 during the month. jobs slowed in May from 263,000 jobs in April, and the unemployment rate is expected to rise to 3.5% in May from 3.4% in April.

The MPC unanimously raised the policy rate another 0.25%

for domestic factors During this period, the baht was still under pressure due to political instability which still had problems in forming a government. While on Tuesday (30/5), the Ministry of Commerce revealed Thailand’s international trade conditions in April. Total exports were 21,723 million US dollars. Down 7.6% from the same month last year, while imports were worth US$ 23,195 million. 7.3% lower than the same month last year, resulting in Thailand’s April trade deficit of US$ 1,471 million and in the first four months of this year, Thailand had a trade deficit of US$ 4,516 million.

about the results of the meeting The Monetary Policy Committee (MPC) unanimously decided to raise the policy rate by 0.25 per cent per annum from 1.75 per cent to 2.00 per cent per annum, with immediate effect. In addition, the Committee assessed that the Thai economy has the potential to expand higher than what was assessed. This is partly due to the government’s economic policy. Thailand’s economy is expected to expand continuously at 3.6 and 3.8 percent in 2023 and 2024, respectively.

During this week, the baht moved within a range between 34.53-34.89 baht/US dollar. and closed on Friday (2/6) at 34.52/54 baht/USD.

As for the movement of the euro, the market opened on Monday (29/5) at 1.0723/27 USD/EUR. Depreciated from the end of the market on Friday (26 / 5) at 1.0731 / 35 USD / EUR. In the last 2 days, the EUR has gradually weakened in line with the appreciation of the USD.

Meanwhile, an official of the European Central Bank (ECB) said that euro zone inflation is uncertain whether it could return to 2% this year. And it is expected that the ECB’s next monetary policy meeting today, June 15, will likely continue to raise interest rates.

At the end of the week, the euro strengthened after the dollar fell in the positive range as the market expected the Federal Reserve (Fed) to maintain interest rates at its June 13-14 meeting. The euro released the unemployment rate at 5.6%, in line with market expectations.

In addition, the French National Statistical Office (Insee) said monthly inflation France’s May fell more than expected. as energy and service prices have slowed Although inflation continues to rise above the European Central Bank (ECB) target. During this week, the euro moved within the range between 1.0633-1.0778 USD/Euro and closed on Friday (2/6) at 1.0764/68 USD/EUR.

about the movement of the yen The Yen opened on Monday (29/5) at 140.64/65 yen/USD. Weakened from Friday’s (26/5) close at 136.66/69 yen/USD. The appreciation of the US Dollar continues to put pressure on the Yen. In particular, the expectation that the Fed will raise interest rates another 0.25% at its June 13-14 meeting will push bond yield spreads even further.

However, on Tuesday (30/5), Japan’s Ministry of Labor reported Japan’s April unemployment rate. It fell to 2.6% from 2.8% in March. The figure was below analysts’ expectations of 2.7%. The yen was supported by a private sector survey released on Thursday (1/6), which showed that Japan’s manufacturing activity expanded for the first time in a quarter of the seven-month period in May was driven by an increase in output and new orders. Including a positive outlook for next year.

The final Jibun Bank manufacturing Purchasing Managers’ Index (PMI) came in at 50.6 in May, breaking above 50 for the first time since March. October last year And this is the fastest growth rate in a year, with a level of 50 and above indicating that business activities were on the rise, output and new orders reached their highest levels in 12 and 13 months respectively. as business and consumer confidence boost demand

However, IMF Chief Economist Gurinchas said the BOJ should prepare for risks if inflation rises above expectations. And they should be prepared to use tight monetary policy if inflation stays above the BOJ’s target for too long. During this week, the Yen moved within the range between 138.45-140.93 Yen/US Dollar and closed on Friday (2/6) at 139.00/03 yen/USD.


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