Baht Weakest in 10 months

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Of course 37 would be better...or 38...or 39...or 40...555.

I'll take 555 . . .

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Baht expected to dive on US data

Currency could fall below 36 per dollar

by Nareerat Wiriyapong

January 26, 2024

The baht could slide further, touching 36 to the dollar if US economic data released later this week indicates a resilient US economy and further delays to the Federal Reserve's trim of interest rates, says Kasikorn Research Center (K-Research).

Weaker results than expected for the Thai economy have prompted continued capital outflows, noted the think tank.

The Thai currency traded at 35.76-78 against the greenback on Thursday morning, sliding from Wednesday's close of 35.68 after the US Manufacturing and Services Purchasing Managers' Indices for January posted the highest levels in 15 months and seven months, respectively.

The baht fell to a two-month low of 35.88 to the dollar during trade on Wednesday.

"Signs of resilient manufacturing and service sectors in the US support the probability that the Fed will keep the rate at high levels for longer as inflation is still higher than the central bank's target," said Kanjana Chockpisansin, head of research at K-Research.

The think tank projects the US central bank will start cutting the rate in the second quarter this year at the soonest, she said.

Meanwhile, the outlook for the Thai economy remains fragile and lacks fundamental factors to drive growth, said Ms Kanjana.

As of Jan 24, fund outflows from the Thai stock market totalled 23.9 billion baht year-to-date, while foreign investors sold 5.9 billion baht worth of Thai bonds, she said.

"If US GDP and inflation figures due this week are strong, the baht could possibly fall to below 36 to the dollar," Ms Kanjana told the Bangkok Post.

SCB Financial Markets said the baht has been supported by a stronger yuan as Beijing ramps up stimulus measures, with the People's Bank of China preparing to cut the reserve requirement ratio (RRR) for commercial banks.

The agency estimates the baht will move in a range of 35.65-90.

Ms Kanjana, however, believes the US factors will have a more profound impact on the baht's movement.

"The RRR measure is something the market has expected for some time. The Chinese government has clearly stated it will do so as the economy needs a boost," she said.

"Once the Chinese economy shows clear signs of a recovery, then the yuan and other currencies in the region should strengthen."

https://www.bangkokpost.com/business/ge ... on-us-data

[Undaunted]

[Gaybutton]

At the time of this post, the WISE exchange rate is 36.0645. This is the first time the rate reached that level since a couple days last October. Before that, the last time the rate reached that level was in November 2022.

[Dodger]

There was a prediction by several financial analysts early in 2023 that the baht would weaken to 37 to the USD by years end. That never happened but who knows, maybe it will this time.

Go - Baby - Go!!!

[Gaybutton]

There was a prediction by several financial analysts early in 2023 that the baht would weaken to 37 to the USD by years end.

There are always predictions by financial experts about where the baht is going, but only rarely do they get it right. Of course I am very happy to see the exchange rate move in our favor, but it never seems to last very long before the baht starts to strengthen again. My hope is not only will the exchange rate move in our favor, but once it peaks, it stays there - and the only additional movement is more in our favor.

[Gaybutton]

I sure hope they got it right about this one . . .
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K-Research: Baht may slip to 37 per dollar

by Nareerat Wiriyapong

February 21, 2024

The baht could slide to 37 to the dollar later this year as a weakening Thai economy and a delay in US interest rate cuts pressure the Thai currency, says Kasikorn Research Center (K-Research).

Kanjana Chockpisansin, head of research, banking and financial sector at the think tank, said recent data from the National Economic and Social Development Council (NESDC) is the main reason causing the baht to depreciate more than other regional currencies against the dollar.

"The baht traded at 36.10-12 to the greenback on Tuesday morning, compared with Monday's and last week's close of 36.02 baht to the dollar," she said.

The NESDC revealed on Monday the economy expanded by only 1.7% year-on-year in the fourth quarter of 2023, less than projected, and declined 0.6 percentage points from the previous quarter. The government planning unit slashed its figure for 2023 GDP growth to 1.9% from 2.5%, while the outlook for 2024 was downgraded to 2.2-3.2%, from its forecast in November of 2.7%-3.7%.

The decreases prompted K-Research to slash its GDP growth estimate for this year to 2.6% from 3.1%, as private consumption is expected to slow as government stimulus has ended.

The baht has depreciated 5.5% this year to date, ranking second among regional peers, while the Japanese yen has weakened by 6.1%. The US dollar index has gained 3%.

"The Federal Reserve is likely to start cutting the policy rate in June, later than previous market forecasts. Coupled with weakening Thai economic data, these two factors could pressure the baht to decline, possibly reaching 37 to the dollar later this year," said Ms Kanjana.

SCB Financial Markets anticipates the baht to move in a range of 36.05-25 on softer Thai economic data, while Prime Minister Srettha Thavisin called on the Bank of Thailand to have an urgent special meeting to cut interest rates.

Ms Kanjana said factors to monitor are foreign fund flows and the move by the People's Bank of China (PBOC) to cut the five-year loan prime rate (LPR) by 25 basis points to 3.95% yesterday, the first cut in eight months, in an effort to stimulate the economy.

"The market earlier anticipated the PBOC would lower both the 5- and 10-year LPRs, but it cut only the 5-year rate, thus the impact has been minimal so far," she said.

https://www.bangkokpost.com/business/ge ... per-dollar

[Undaunted]

[Gaybutton]

Thank you Undaunted. For a while the exchange rate seemed to stagnate, but now it's on the move again - in our favor.

At the time of this post, the WISE US dollar to baht exchange rate is 36.184. Fingers crossed, folks. I think we all hope it keeps moving our way, and doesn't slide again.

[Undaunted]