The Kasikorn Research Center (KResearch) has indicated that the Thai baht is expected to fluctuate within the range of 36.65-36.85 baht per dollar this week as markets await the outcomes of crucial monetary policy meetings in Thailand and the United States scheduled for midweek.
Key factors to monitor this week include foreign capital flows, gold prices, regional currencies, and the decisions from Thailand’s Monetary Policy Committee (MPC). Significant international economic factors include meeting minutes of the Federal Open Market Committee (FOMC), China’s May consumer and producer price indices, and the U.S. May consumer price index.
A financial strategist from Krungthai GLOBAL MARKETS at Krungthai Bank noted that the baht’s depreciation might slow as market participants might not make significant adjustments to their currency holdings until the U.S. CPI report and the FOMC meeting results are released.
Some market players might also sell the dollar as it strengthens, potentially easing the baht’s depreciation pressures. However, the baht continues to face pressure from foreign investors selling Thai assets, despite attractive valuations, likely due to concerns about domestic political issues. If these concerns subside, foreign investors might return to Thai assets.
The baht may also experience volatility from gold transactions, as gold prices could face selling pressure until market concerns over the Fed’s interest rate direction ease. Additionally, this week’s labor market report from the UK could be another factor to watch. If UK employment data is worse than expected, it could lead to speculation that the Bank of England might lower interest rates sooner, potentially weakening the pound and strengthening the dollar.
Therefore, the baht’s movement could remain volatile, influenced by changing factors affecting its direction, including market views on the Fed’s interest rate trends. (NNT)
