BANGKOK, Thailand – Krungthai GLOBAL MARKETS has reported that on September 18, the Thai baht opened at 33.39 baht per US dollar, slightly weaker than the previous day’s close of 33.30. The baht is expected to fluctuate sideways as markets await the outcome of the Federal Open Market Committee (FOMC) meeting. The projected range for the baht is between 33.25-33.50 baht per dollar, with a broader range of 33.00-34.00 baht per dollar during the gradual response to the FOMC decision.
The weakening of the baht is attributed to the rise in the US dollar and the 10-year US bond yield following better-than-expected US economic data, such as retail sales and industrial production figures for August. Additionally, the recent drop in gold prices has led some market players to buy gold on the dip, further pressuring the baht.
The market is also keeping an eye on the UK’s Consumer Price Index (CPI) report for August, as it could influence the Bank of England’s (BOE) future monetary policy. If inflation shows signs of slowing, it may allow the BOE to cut interest rates by up to 50 basis points this year, as anticipated by the market.
In the US, before the FOMC meeting results, investors will be watching housing market data and the third-quarter growth forecast from the Atlanta Fed. Oil inventory reports may also affect short-term crude oil prices.
Krungthai Global Markets expects the baht to continue moving sideways in the lead-up to the FOMC announcement early Thursday morning. However, during the day, the baht may weaken slightly due to market players buying gold on the dip after prices fell from recent highs.
The outcome of the FOMC meeting and the new “Dot Plot” could influence the baht’s future trajectory. If the Fed signals aggressive rate cuts as expected by the market, the baht could strengthen. However, if the Fed does not signal rapid cuts, the baht may face downward pressure.
