BANGKOK, Thailand – Thai baht opened at 34.58 THB/USD on December 19, weakening significantly from the previous close of 34.21 THB/USD. The baht is expected to fluctuate between 34.35-34.75 THB/USD in the next 24 hours, with potential volatility driven by the outcomes of the Bank of Japan (BOJ) and Bank of England (BOE) meetings.
Since last night, the baht has continued to depreciate (within a range of 34.18-34.62 THB/USD), influenced by the rising U.S. dollar and a higher 10-year U.S. bond yield after the Federal Reserve’s expected 25bps rate cut to 4.25-4.50%. However, the Fed’s upgraded economic outlook and reduced expectations for further rate cuts in 2025 (from 4 cuts to 2 cuts) helped stabilize market expectations.
Despite this, concerns arose following comments from the Fed Chairman during a press conference, which led market players to worry that the Fed may cut rates less than previously indicated, especially considering potential impacts from the policies of the Trump 2.0 administration. Additionally, the baht is facing further pressure from a sharp drop of over -2.3% in gold prices (XAUUSD), which is being weighed down by the stronger dollar and rising U.S. bond yields.
