Bath opened at 35.37 am today. The baht was steady against the dollar, unchanged from the previous day's close. Keep an eye on the BoT economic numbers.
Mr. Poon Panishpipun Capital markets strategist Krungthai Global Markets Krung Thai Bank revealed that The baht opened this morning at 35.37 baht per dollar. Constant is unchanged from the previous day's closing position.
The baht traded in a sideways range (oscillating between 35.30-35.45 baht per dollar) overnight, with the market strengthening ahead of the US jobs report.
This follows a strengthening dollar and falling gold prices before the baht soon reverses its depreciation. The Fed is in no rush to cut interest rates after the US jobless numbers continue to rise, leading market players to expect higher-than-expected increases. (Only 41% chance of rate cut in March)
However, the pot rebounded. This is in line with changes in positions held by market players ahead of the outcome of the Fed meeting on Thursday after the dollar eased slightly.
for Trend of baud rate We estimate that the value of the baht may fluctuate sideways as most market players wait to see. Results from the central bank meeting on Thursday morning.
However, during the day, we expect the bot to fluctuate accordingly. The atmosphere in Asian financial markets depends on China's latest PMI index report, which will have some impact on the direction of Asian currencies that depend on the Chinese economy, such as the yuan (CNY) and the baht.
Additionally, you should keep a close eye on the Bank of Thailand's (BoT) monthly summary as the BoT lowers its economic forecasts. This may reflect that the BoT is likely to cut the policy interest rate this year, both significantly below the growth rate and inflation. This film may put some pressure on Pat today to depreciate.
In addition, one should watch out for fluctuations in the baht before and after the results of the Fed meeting gradually become known. We estimate that if the central bank reiterates its position that it is in no rush to cut interest rates, it will emphasize a strong economic picture. This could further dampen market players' expectations of “swift and deep” interest rate cuts by the central bank, we estimate. If market players believe it, the central bank will not cut interest rates less than 5 times this year (less than -125bps), which may cause the dollar to gradually strengthen.
You may see the dollar index (DXY) rise above the 104-point level, while the US 10-year bond yield may rise to test the 4.20% zone. You can also see the baht weakening and breaking the resistance zone at 35.50 baht per dollar. (This may decrease to 35.80 baht per dollar)
Meanwhile, we think such a picture could put some downward pressure on the dollar and US 10-year bond yields if the central bank starts to show its willingness to use more accommodative monetary policy. (But not much) Until the market knows the US employment data report, the baht will strengthen and test the 35.00-35.10 baht support zone per dollar. (We estimate that the baht cannot easily strengthen to 35 baht per dollar in the short term.)
During this period, the volatility of the baht was higher than the historical average. (Looking at weekly bot law) Clearly therefore we still recommend that traders use various hedging instruments such as options to maximize efficiency in hedging against exchange rate risk.
And choosing to transact in the local currency apart from using the above instruments is another interesting way to manage exchange rate risk. Entrepreneurs should compare transaction costs and hedging schemes before making every decision.
Looking at the baud today, it is expected to be in the range of 35.25-35.55 baud.T/dollar knew the outcome of the Fed meeting in the pre-market period.
and estimate the range of baht in the range of 35.10-35.80 baht per dollar.Lars gradually acknowledged the results of the federal meeting during the market.
The players in itUS stock market They did not dare to take additional risks and were cautious. Expect to see earnings reports from big tech companies like Microsoft and Alphabet, including the results of the Fed meeting. As a result, the overall S&P500 index closed the market at -0.06%.
The latest S&P500 index futures contract fell nearly -0.4% after market players were disappointed by the performance of both Microsoft -0.4% and Alphabet -5.5%, resulting in lower stock prices. (after hours).
ShoreEuropean stock market The STOXX600 index continued to rise +0.16% amid bright earnings reports from most listed companies.
In addition, the growth rate of the Eurozone economy in the 4th quarter of the previous year came out at +0.1%y/y (+0.0%q/q), which was better than expected. This helps market players to partially allay their concerns about the Eurozone economy heading towards recession.
on the shorebond market The situation in the US stock market has returned to a more cautious state, including concerns about the amount of bonds issued by the US government. That easing has also put pressure on the US 10-year bond yield, which has yet to clearly improve. And held steady near 4.04%, the latest US economic data report has led market players to lower expectations of the central bank's tendency to cut interest rates faster.
However, we still recommend that market players wait closely to follow important US economic data reports as this will affect market players' view of the Fed interest rate outlook. To reduce the risk of loss, market players should focus on the Buy on Dip strategy. Especially if the US 10-year bond yield remains unchanged and will continue to rise. (Keep an eye on the first resistance zone, line 4.20%).
pageCurrency market The dollar strengthened slightly and the dollar fluctuated sideways. From the Report on Job Openings, which came in better than expected. This is meant to reduce dollar holdings before learning of the results of the central bank meeting before shrinking lower. As a result, the overall dollar index (DXY) continues to fluctuate near the level of 103.4 points (oscillates within the range of 103.3-103.6 points).
In the sectionGold price Even before the US jobs report, gold prices (COMEX gold contract for delivery in April) managed to rise to the zone of 2,060-2,070 dollars per ounce.
But the price of gold could not stay at that level for long. After market players move to sell and take profits. According to the report, the number of jobs in the US came in better than expected
This has supported both the dollar and rising US 10-year bond yields. Gold prices still have ample support near the support zone at $2,030 an ounce. This is because market players are waiting to see the results of the Fed meeting. In addition, the dollar and US bond yields also shrank slightly.
Today, market players will await the Purchasing Managers' Index report for the manufacturing, industrial and service sectors in the Economic Data Report section. China (Manufacturing and Services PMIs).
On the Thai side, we think we should keep an eye on the Bank of Thailand's monthly economic report (BOT Monthly Summary). What signals will be sent about adjusting economic forecasts? Recently, the finance ministry has slightly lowered its economic growth forecast for 2023 and 2024.
On the US side, market players will be watching ADP's private sector employment report, which will help reflect the employment situation in the US, before the Fed meeting results. And Nonfarm Payrolls will be announced on Friday. A key highlight will be the results of the central bank's FOMC meeting, which will be known around 2:00am Thai time.
And we estimate that in addition to the above economic data reports, market players will closely follow the earnings reports of the listed companies.
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