The baht opened this morning at 36.59 baht per dollar. “appreciate”

Mr. Boon Panichphepon, Capital Markets Strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank He revealed that the baht opened this morning at 36.59 baht per dollar. “Appreciation” from the previous day’s closing level of 36.75 baht per dollar.

During the previous night the value of the baht fluctuates. But in general, it is an adjustment of discretion. (fluctuating in the range of 36.52-36.79 baht per dollar) following dollar weakness. After the recent release of mixed US economic data, US 10-year bond yields have contracted somewhat, prompting market players to start taking more risks. This reduces the need to hold the dollar as a safe haven asset, as well as the technical recovery of major currencies. Both the British pound (GBP) and the euro (EUR) from major support areas exerted pressure on the dollar. However, the flow of gold buying transactions during the downturn and after… The price of gold continued to fall. They put a lot of pressure to prevent the baht from rising.

The atmosphere in the US stock market is starting to return to being more open to risk. After 10 years of bond yields, the US has contracted somewhat. According to the US economic data report, it came out mixed and as a result, shares of major technology companies (Tesla +2.4%, Meta +2.1%) recovered somewhat, however, market players still do not dare to take full risks. Amid the risk of a government shutdown if Congress is unable to pass the draft budget in time. Furthermore, market participants are awaiting today’s US PCE inflation report, which resulted in the S&P 500 overall market closing down 0.59%.

As for the European stock market, the STOXX600 index turned and rose by +0.36%, supported by the recovery of stocks bearing the slogan of Chinese economic recovery, such as the Branded Products Group (LVMH +1.0%) and the Mining Group. (Rio Tinto +2.2%), which is partly based on market players’ hope that China’s PMI report over the weekend will reflect a better picture of China’s economic recovery. In addition, both groups of stocks faced strong selling pressure. Continuously in the past period, the European stock market continues to receive support from the continued rise in energy stocks (Shell +1.2%).

On the bond market side, the US economic data report came out mixed and with the contraction in crude oil prices, the US 10-year bond yield returned to contraction near the 4.60% level after rising to nearly the 4.70% level during the period in which the market gradually received the economic data reports. American. We maintain our view that investors should buy and accumulate long-term bonds gradually. Especially during periods when bond yields are rising. At present, many market players have short positions in longer-term bonds, and if there are factors that change the higher view to the longer, we believe that gradually closing short positions may help support bond yields to adjust downward easily and may see a rapid decline in the short term. (This is in line with a more volatile bond market during this period, with fluctuations of more than 10 basis points likely to occur frequently)

On the currency market side, the dollar turned into deflation, under the pressure of the technical rebound in both the pound sterling (GBP) and the euro (EUR). Meanwhile, US economic data reports that came out mixed, including the gradual exposure of market players to risks, also put pressure on The dollar faces some profit-taking pressure. Pressure on the overall dollar index (DXY) to gradually decline near the 106.2 points area (range 106-106.6 points) in terms of gold prices, despite the rise in both the US 10-year bond yield and the dollar will contract somewhat, but the price of gold (contract Comex gold for December delivery) continues to decline. With a chance of falling to $1,875 an ounce. Before it rebounds to the $1,883 per ounce level, we believe that some market players may continue to buy gold within a short period of time. This transaction flow also contributes to pressure on the baht to depreciate its value.

Today, the most important event will be inflation reports from both the Eurozone and the United States. The market will wait and see. The Eurozone inflation index will be released around 4:00pm local time. Before receiving the US PCE inflation report at around 7:30 PM Thailand time

In addition to the above-mentioned economic data reports, market players will be monitoring statements by key central bank officials, including the Federal Reserve and the European Central Bank, to assess monetary policy expectations in the coming period.

As for the baht value trend, we believe that the baht depreciation momentum may start to slow somewhat. After the dollar weakened and began to swing sideways, which is partly due to market players waiting for the US PCE inflation report today, and additionally, if the price of gold can rebound somewhat. After contraction to test the important support area. There may also be an influx of profit taking transactions after the recovery in gold prices. This helped slow the baht’s depreciation somewhat. However, the factors that pushed the baht to decline have not disappeared yet. By the end of the month we still see end-of-month dollar purchase transaction flows from operators, and in addition, foreign investor fund flows remain uncertain. On the equities side in particular, and contrary to our assessment, selling pressure in Thai stocks by foreign investors is expected to slow after the SET index fell to test the support area, as well as some contraction in Yale bonds. The 10-year bond may help reduce pressure on the 10-year Thai bond yield, including selling pressure on Thai bonds. This will help slow the depreciation of the baht during this period.

You must be careful. Baht rate fluctuations during the period when the market gradually received reports of inflation in both the Eurozone and the United States. During this period, the value of the baht may fluctuate within a wider range than its normal range.

We continue to see all assets still in a period of high volatility. Both uncertainty about the direction of monetary policy and concerns about the prospects for recovery of the Chinese economy make us maintain the advice that entrepreneurs should use a variety of hedging instruments, such as options, to increase efficiency in hedging against exchange rate risks. In addition to using the tools mentioned above, choosing to deal in the local currency is another interesting way to manage exchange rate risk. Entrepreneurs should compare transaction costs and hedging plans before making any decision.

Looking at the baht today it is expected to be at 36.40-36.70 baht/$ before identifying the PCE inflation rate in the US.

The baht range is estimated at 36.30-36.75 baht/$ during the period when the market gradually recognizes the PCE inflation rate in the US.