BANGKOK, Thailand – The Thai baht opened at 33.55 THB per US dollar on November 5, slightly appreciating from the previous closing rate of 33.62 THB. Krungthai GLOBAL MARKETS strategist, Mr. Poon Panitchpipat, forecasts the baht will likely fluctuate within a range of 33.50-34.00 THB per dollar today, with potential volatility as markets digest the ongoing US election results.
In the past 24 hours, the baht has gradually strengthened in a sideways movement (33.53-33.67 THB), as the US dollar weakened due to profit-taking in “Trump Trades” assets, ahead of the US election results. However, the dollar showed brief moments of strength after the October ISM Services PMI report exceeded market expectations. Additionally, the baht received some support from a rebound in gold prices, nearing $2,750 per ounce, while the US dollar and 10-year Treasury yields trended lower.
The key focus for today will be the US election results, with potential outcomes possibly becoming clearer by the afternoon, though full results could take several days to be confirmed. This uncertainty is expected to lead to heightened market volatility as investors adjust their views on who will win the election. The Thai market will also keep an eye on significant monthly economic data from Vietnam, including retail sales, industrial production, and inflation figures.
In Thailand, analysts anticipate a slight increase in the country’s October CPI inflation, forecasting a rise to 0.96%, which brings inflation closer to the Bank of Thailand’s target range of 1-3%. This is attributed to the recovery in domestic consumption, driven in part by government stimulus measures.
Looking ahead, market players will also monitor earnings reports from listed companies, which could influence market sentiment.
Regarding the Thai baht, Krungthai Global Markets projects heightened volatility as the US election results unfold, with potential swings in the baht’s value based on expectations of the election outcome. Historical data from the 2016 US election suggests the baht could fluctuate within a 0.6% range, though current market conditions may result in greater movements, with swings possibly exceeding 1% or 40 satang.
If the US election outcome follows the “Base Case” scenario, with Donald Trump winning re-election, markets are likely to align with “Trump Trades,” pushing the US dollar and 10-year Treasury yields higher, which may result in a weaker baht, testing resistance around 34.00 THB per dollar.
Conversely, if Kamala Harris wins, particularly with a Democrat-controlled Congress (“Democrat Trifecta, Blue Sweep”), market players are expected to reduce their exposure to “Trump Trades,” pushing the US dollar and yields lower. This scenario could support gold prices and strengthen the baht, potentially breaking below the key support level of 33.50 THB per dollar.
