HoonSmart.com>> “Bank of Ayudhya” (BAY) expects the baht to trade in the range of 35.20-35.90 baht/dollar this week. Investors will follow the central bank governor’s comments on November 9 by looking at non-farm payrolls and jobs. American services cooled
Global Markets Group Bank of Ayudhya (BAY) has a view on the direction of the baht this week with the baht moving in a range of 35.20-35.90 baht/dollar this week compared to last week. The baht ended weaker at 35.71 baht/dollar after trading in a range of 35.71-36.33. The dollar weakened against all major currencies last week. In the first period, the yen hit its lowest level in 1 year after the Bank of Japan (BOJ) further eased yield curve control measures by keeping the 10-year bond yield at around 0% and redefining bond yields at 1.0%. reference point rather than a fixed ceiling.
Also, the BOJ has signaled that it is in no rush to end negative interest rate policy. This disappointed investors who had expected a more aggressive policy adjustment in line with Japan’s global environment and inflation. The US Federal Reserve (Fed) kept interest rates at 5.25-5.50%, the rate for two consecutive meetings. Meanwhile, the central bank chief said the economy is still strong. But it noted that rising long-term bond yields could tighten financial conditions and drag the economy forward. This stance has given the market confidence that the central bank’s rate hike cycle is over. The Bank of England (BOE) voted unanimously to keep interest rates on hold at a 15-year low of 5.25%. Foreign investors sold Thai stocks for 3,171 million baht, but bought bonds for 21 million baht.
For this week’s overview, Krungsri Global Markets Group sees investors heeding the Fed chief’s comments after the U.S. nonfarm payrolls and services sector index slowed on Nov. 9. In addition, we see the dollar as a new low with wages rising at the slowest rate since mid-2021. However, a key condition for further broader dollar weakness from current levels is that the market wants to see clear signs that the US economy and inflation are fading relative to other regions.
For domestic factors, investors will focus on Thai inflation in October. Meanwhile, the current account surplus registered a surplus of $3.4 billion in September. A 6-month high. BoT governor expressed concern over housing credit and public debt. He opined that capital flows have been out since the beginning of the year against other countries in the region. And the value of the baht is very volatile compared to the past
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