Money Markets and International Transaction Business Department TMB Thanchart (ttb) revealed that the baht opened at 36.85 baht/$ this morning, down compared to yesterday's market closing price of 36.75 baht/$. The US dollar rose against the currency, mainly driven by higher US bond yields. The yield on 10-year US government bonds rose to above 4.5%.
After data showed that US consumer confidence rose sharply in May, this led investors to lower their expectations for an interest rate cut in September.
Investors will be watching the release of the US personal consumption expenditures price index on Friday for signs of inflation. The Personal Consumption Expenditures Index is the Fed's preferred measure of inflation. Because it can detect changes in consumer behavior and covers the prices of goods and services more broadly than the Consumer Price Index (CPI).
Yesterday, foreign investors bought a net 1,073 million baht in the bond market and sold a net 3,562 million baht in the Thai stock market.
Today's currency framework and recommended strategies
USD/THB 36.70-37.00
*We recommend gradual buy at 36.70/sell at 36.95
EUR/THB 39.50 – 40.00
*We recommend gradual buying at 39.50 / selling at 40.00
JPY/THB 0.2315 – 0.2355
*We recommend gradual buying at 0.2315 – 0.2355
GBP/THB 46.50 – 47.00
AUD/THB 24.20 – 24.50
Siam Commercial Bank Financial Markets Group assesses the baht today to move in the range of 36.70-37.00 baht/dollar. The value of the baht depreciated rapidly overnight. From the dollar index, which rose at the fastest pace in one month, in addition to US Treasury yields, which were revised higher.
US bond yields continued to rise following demand for US government bond auctions. Output is lower than expected and the market is concerned about supply possibly being too much, pushing global yields higher accordingly.
German inflation rose 2.8% year-on-year, up from 2.4% last month, and the market expected it to reach 2.7%, coming from lower fundamentals last year.