The Thai baht reached its strongest level in four and a half months, trading at 35.62 baht per U.S. dollar before closing the day at 35.64 on Wednesday.
This appreciation was attributed to several factors, including a rise in the Japanese yen following the Bank of Japan’s (BOJ) decision to increase interest rates and gradually reduce government bond purchases. Additionally, the global rise in gold prices and positive net fund inflows from foreign investors into Thai bonds and equities contributed to the baht’s strength.
Kanjana Chokpaisalsilp, an executive at the Kasikorn Research Center, noted that the market is closely monitoring the U.S. Federal Reserve’s upcoming decisions, which could impact the dollar and other currencies.
For the next trading days, the baht is expected to move within the range of 35.50-35.90 baht per U.S. dollar. Key factors to watch include market reactions to the U.S. Federal Reserve’s meeting outcomes, foreign capital flows, the Bank of England’s meeting results, Eurozone and U.S. manufacturing PMI data for July, and U.S. weekly jobless claims figures.
The BOJ raised its policy interest rate to 0.25% and reduced its monthly government bond purchases to 3 trillion yen, indicating a shift from its long-standing monetary easing policies.
BOJ Governor Kazuo Ueda stated that while inflationary pressures could impact consumption, the overall economic outlook remains strong. The BOJ is prepared to continue adjusting interest rates as necessary, given the moderate rise in wages and inflation.
