Today, October 20, 2023, the baht started at 36.38 baht per dollar. Depreciating from the previous day’s close of 36.29 baht to the dollar. Looking at the baht today, it is expected to be around 36.25-36.55 baht per dollar.
Krung Thai Bank Chamber of Commerce Analyst Mr. Poon Panichpipun said. Today’s baht value It opened at 36.38 baht per dollar. Depreciating from the previous day’s close of 36.29 baht to the dollar. The value of the baht gradually changes in a depreciating manner during the previous night. (fluctuating in the range of 36.23-36.41 baht per dollar) with a weaker trend following the risk-taking climate of the financial market from the still hot Israeli-Hamas war situation. This encourages the dollar to gradually strengthen due to demand for safe-haven assets and, at the same time, concern about the consequences of war. including the overall picture of the US economy. That’s still good, which has market players worried about the Fed’s policy interest rates being higher for longer, pushing the US 10-year bond yield back up to 4.90%.Gold behindGold pricePrices continue to rise due to the risk of war.
The S&P500 index fell more than -1.34% amid pressure factors including 1) the Israeli-Hamas war situation is likely to intensify and escalate, 2) concerns about the earnings outlook of chipmakers such as Nvidia after the official US announced plans to freeze chip exports to China; and 3) concerns about the central bank’s tendency to maintain its policy interest rate high over the long term. Reports of even brighter US economic data and the effects of the war are causing oil prices to rise. Affects the downward trend in inflation
for Trend of baud rate We assume that Pat may face further depreciation pressure. The dollar started to strengthen somewhat as a result of the concern that the Israel-Hamas war situation is likely to intensify and escalate amid the risk situation in the financial market. However, the baht may find some support. Then from the transaction flow to sell the gold and make a profitGold priceAlso adjusted upwards following war risk. Financial flows from foreign investors remain highly volatile. This could be another factor putting pressure on Pat. Volatility and depreciation may occur If foreign investors continue to sell Thai properties, we estimate that strong selling of Thai properties by foreign investors will not be too drastic. Because the SET index has fallen to a level where valuation is not high and is an important technical support zone. As for Thai bond yields, they may not continue to rise (market players are expected to wait for clarity on digital wallet activities).
However, one should be cautious about volatility during the period when the market gradually receives a statement from the central bank chief. This is because market players are beginning to place more emphasis on the central bank to continue raising interest rates either at the December meeting or early next year, and see the central bank cutting interest rates by only -50bps next year. The central bank chief is changing market players’ view of the Fed’s interest rate trajectory. This can have a major impact on financial markets.
Yet we see that each asset is still highly volatile. Uncertainty over the direction of monetary policy risks intensifying and escalating the war situation from both sides. Advises that traders should use various hedging instruments such as options to increase 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 baht today, it is expected to be around 36.25-36.55 baht per dollar.
On the European stock market side, the stoxx600 index fell more than -1.05% amid concerns over the development of the war situation.The European stock market also came under pressure as the earnings of European listed companies came out worse than expected. . Tech stocks, particularly semiconductor group ASML -3.4%, gained some more support as energy stocks BP +0.5% rose after crude oil prices rallied on worries about the war situation.
On the bond market side, the US economic data report is the latest still to come out bright. Including the ever-increasing trend in crude oil prices. This has left market players worried about the central bank’s tendency to maintain policy interest rates at high levels for a long time, unless the war situation escalates, affecting inflation trends. Although the environment in the financial market is clearly risk-free, the US 10-year bond yield may gradually rise to 4.90% due to the volatility of long-term US bond yields, which has remained unchanged from our expectations during this period. We follow the same advice as the risk-reward of holding long-dated bonds during high yields is beneficial and attractive, so investors can gradually buy on dips as bond yields rise.
On the currency market side, the dollar rebounded and strengthened. The Dollar Index (DXY) edged higher near 106.5 points (range 106.1-106.7 points) as the greenback strengthened in line with market players’ comments that they are still concerned about the possibility of the central bank keeping interest rates higher against major currencies. The need to keep the dollar as a safe-haven asset during long-term and war-time market worries. While both the dollar and the US 10-year bond yield could rise in terms of gold prices, gold prices (the COMEX gold contract for December delivery) are still supported by the market’s demand for gold as a safe-haven asset. Worries about the war and the price of gold gradually rose to a level of $1,960 per ounce. The rise in gold prices has encouraged market players to gradually sell gold to make some profit. This exchange flow helped to reduce the depreciation of the baht.
Today, market players are waiting to follow the report of US labor market data, such as the number of applicants for unemployment benefits (jobless claims), to gauge the outlook for the Fed’s monetary policy. In addition, important highlights market players will be waiting to follow: the report by central bank officials, especially Fed Chair Jerome Powell (at 11:00 pm local time) is very close after the latest US economic outlook. It has not come down much. Meanwhile the war factor can also affect the inflation trend. Market players want to monitor What will be the central bank chief’s stance on the central bank’s monetary policy perspective?
Additionally, market players will continue to monitor the Israeli-Hamas war situation. Will it escalate or will the war expand to affect the entire Middle East region?
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