Global Markets Group Bank of Ayutthaya Public Company Limited estimates the Baht this week is trending in the range of 36.50-37.00 Baht/Dollar compared to last week. The baht ended stronger at 36.71 baht/dollar after trading in a range of 36.68-37.03 baht/dollar.
13 May 2024 – The dollar weakened slightly against the euro, but strengthened against the yen last week. Federal Reserve members expressed mixed views on the first interest rate cut amid persistently high inflation as the weakening could allow the central bank to cut interest rates more quickly.
The Bank of England (BOE) kept interest rates at 5.25%, a 16-year low, but cut its inflation forecast. This indicates that the BoE may cut interest rates more than investors expected. The yen weakened even as Japanese officials expressed more concern about the exchange rate and its impact on inflation. Foreign investors sold 1,597 million baht worth of Thai stocks, but 436 million baht worth of bonds were bought net.
Krungsri's Global Markets Group commented on market conditions this week as markets will follow April US inflation and retail sales data. Higher-than-expected U.S. inflation, including comments from the Fed chief, will have market participants questioning whether they will start cutting rates this year. So, if the numbers come in closer or lower than what investors expected. This exposes US bonds and the dollar to downside risk. Support the recovery of regional currencies, including the baht, in the near future.
Also, another reason for the dollar's decline is signs of economic recovery outside the US. Whether it's news from Europe or China this week, investors will focus on the release of China's April production and consumption figures. After China reported that exports grew 1.5% in April compared to the same period last year. Exports contracted 7.5% in March, while Chinese imports rose a better-than-expected 8.4% in April.
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