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Baht strongest in 2 months

Started by thaiga, January 19, 2013, 07:37:54 PM

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thaiga

Quote from: Johnnie F. on July 15, 2020, 12:08:52 AM
And now the baht weakens all of a sudden.
but not enough, in 2008 i visited the Uk, transfered a large amount to Thailand @ 60 baht, the clerk who i knew said, you sure you know what your doing.

will we ever live long enough to see even 60 again :-[ my first transfer was 71, 2005 i think.
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht shows slight weakness as all eyes on govt's steps to prevent second Covid-19 wave
The baht opened at 31.57 to the US dollar on Thursday morning (July 16), weakening from Wednesday's close of 31.51.

The Thai currency is expected to move between Bt31.48 and 31.68 on Wednesday, said Jitipol Puksamatanan, head of Markets Strategy at SCB Securities.

On Wednesday night, the financial markets were upbeat. The S&P 500 increased by 0.9 per cent, to the same level as at the beginning of this year. Stoxx Euro 600 rose by 1.7 per cent, up by 11 per cent from the level at the beginning of this year.

Meanwhile, other assets moved with caution. The US Ten-Year Treasury yield was stable at 0.63 per cent, while the WTI crude oil price was $41 per barrel. Gold price reached over $1,810 per ounce.

The gross domestic product of China in the second quarter grew by 2.3 per cent, compared to the same period in 2019. This meant that China's economy contracted by 2.4 per cent in the first half of 2020.

Bank Indonesia will hold its meeting on Thursday and is expected to cut the interest rate by 4 per cent, while the European Central Bank will freeze the deposit interest at minus 0.50 per cent and purchase assets under the policy called "Pandemic Emergency Purchase Programme".

In Thailand, the strategist said that investors must monitor how the government deals with the Covid-19 situation, as well as the upcoming Cabinet reshuffle.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht drops to lowest level in weeks as investors move money out

The baht opened at 31.73 to the US dollar on Friday morning (July 17), weakening from Thursday's close of 31.69, falling to its lowest since the beginning of June.

The Thai currency is expected to move between Bt31.67 and 31.87, said Jitipol Puksamatanan, head of Markets Strategy at SCB Securities.

"The baht continues to weaken due to foreign investors' mass sell-offs to take profits in response to uncertainty following the second coronavirus wave and the Cabinet reshuffle," he said. "We expect the baht to recover after industry and tourism sectors across the Asian region resume their operation."

On Thursday night, the financial markets were unchanged. The price of technology shares decreased after many listed companies announced their second quarter performance. The S&P 500 fell by 0.3 per cent, while Stoxx Euro 600 fell by 0.5 per cent.

"The US number of initial jobless claims stood at 1.3 million positions although the number of continuing claims dropped to 17.3 million positions, showing that the labour market recovery was slower than expected," Jitipol pointed out.

"Meanwhile, the European Central Bank still maintains its monetary policy, injecting liquidity of €1.35 trillion into the system to stimulate the economy and is retaining the interest rate at minus 0.5 per cent."

The US dollar strengthened by 0.3 per cent as investors turned to safe haven assets because the stock market is still high risk and the price of oil dropped by 1.1 per cent due to uncertainty after large oil manufacturers declined to cut oil production. However, the Australian dollar weakened the most by approximately 0.5 per cent.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

as you can see by the exchange rates upping a little puting a half of smile   ;D  on some faces as pressure on the baht continues

Worries over economic recovery put pressure on the baht
The Thai currency is expected to move between 31.62 and 31.82, said Jitipol Puksamatanan, head of Markets Strategy at SCB Securities.

The strategist said that concerns about recovery of the Thai economy and Asian capital market were weakening the baht, he added.

On Thursday night, the S&P 500 decreased by 1.2 per cent, in line with the Nasdaq Index which was down by 2.3 per cent. This situation pressured the financial market to a risk-off state.

The US Ten-Year Treasury shrank by 2 basis points to 0.58 per cent, while the WTI crude oil price reduced by 2.2 per cent and gold price rose by 0.8 per cent.

US initial jobless claims this week increased to 1.42 million, due to suspension in the manufacturing sector in several industries, which made the market think that economic recovery would be slow.

The dollar weakened by 0.2 per cent, compared to other main currencies, despite the market being in a risk-off state. The yen and the Swiss franc strengthened as safe haven assets.

In Thailand, automobile sales in June announced this week improved over May, but contracted by 37 per cent compared to June 2019. This made investors wary about Thai economic recovery, as well as the conflict between the US and China.

Investors decided to sell the baht and other currencies, the strategist said, adding that another factor weakening the baht was the Asian capital market.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Thai Q2 GDP, US-China talks outcome key factors in moving the baht next week
Kasikornbank expected the baht to move between 30.80 to 31.20 next week and advised investors to monitor Thailand's gross domestic product of the second quarter, US and China actions after their discussions on Saturday (August 15), and the Covid-19 situation around the world.

The economic numbers to be announced next week include the US housing market index, economic trend this month surveyed by the Fed – Philadelphia and US second-hand house sales in July.

This week the baht strengthened slightly, while the dollar weakened amid the US- China tensions. Moreover, the dollar was sold due to instability in US Covid-19 remedial measures.

On Friday (August 14), the baht closed at 31.13, strengthening from 31.15 the previous Friday.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Strengthening dollar pulls baht down
The baht on Friday opened at Bt31.29 to the US dollar, weakening from Thursday's close of Bt31.26.

The Thai currency would move between Bt31.22 and Bt31.42, Jitipol Puksamatanan, head of Markets Strategy at SCB Securities, said.

On Thursday night, the S&P 500 rose by 0.2 per cent, supported by stocks of financial and property businesses. Also, the US Ten-Year Treasury increased to 0.75 per cent.

The strategist explained that these movements happened after the Fed chairman said in the annual "Jackson Hole Symposium" about the aim of the new financial policies, which was average inflation targeting.

Moreover, the dollar strengthened by 0.1 per cent, compared to other currencies. The investors believed that the financial policies will also help support other US financial assets.

The initial jobless claims announced this week was one million positions, while personal consumption in the US decreased by 34.2 per cent in the second quarter. Besides, pending home sales rose by 2 per cent last month.

Furthermore, the baht on Friday weakened due to the strengthening dollar. The strategist mentioned that the market needed time to get accustomed to the new Fed polices.

However, further changes in the markets, related to polices, will take place after the next Fed meeting on September 15 and 16.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht at crossroads as economy seen bottoming out this year
The baht could be at a turning point. It's the second-worst performing currency in Asia this year, but expectations that the economy may bottom out over the next few months is spurring some bullish bets.

The baht lost ground as Thailand's tourism-dependent economy was hit hard by travel restrictions to control the coronavirus spread. It's down almost 4% against the dollar this year, just behind the Indonesian rupiah, although it's showing signs of revival with gains of 0.5% in August.

Some analysts are turning bullish after Finance Minister Predee Daochai said last week the economy will likely bottom out in the second half of the year and rebound in 2021. Current account data this week could also be supportive as it's forecast to post a surplus of $1 billion in July from a deficit of $247 million in the previous month.

"Over a thee-month horizon, we think it will outperform its Asian peers," says Divya Devesh, head of Asean & South-Asia FX research at Standard Chartered Bank SG Ltd in Singapore. He sees the nation's status as a major gold exporter and positive real yields attracting inflows.

The baht's misfortune is a dramatic swing from last year, when it was the region's best performer with an 8.6% gain. While the economic recovery prospects bode well for the currency, the Bank of Thailand has indicated in its latest meeting minutes that that it will act if needed to prevent a rapid appreciation.

The baht also remains vulnerable to outflows. The Government Pension Fund, a 1 trillion baht asset manager, plans to boost its overseas investments citing limited options in domestic equities.

Technically, the baht remains in consolidation mode as the duelling forces battle it out. The currency pair's 100 day moving average continues to cap any rally against the dollar, while support under 31.00 is limiting any downside movement.

bangkokpost.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht strengthens on recovering capital market, Thai bond purchases
The baht opened at 31.25 to the US dollar today (September 10), strengthening from yesterday's close of Bt31.37.

The Thai currency would move between 31.15 and 31.35 today, said Jitipol Puksamatanan, head of markets strategy at SCB Securities.

Yesterday, the S&P 500 increased by 2.01 per cent, while the Stoxx 600 rose by 1.26 per cent due to a recovery of tech stocks and investors' hopes that the US economy would move forward.

A US job openings and labour turnover survey (JOLTS) yesterday showed 6.62 million new jobs in the US market, signalling that most private companies have returned to the market after being closed because of the Covid-19 crisis.

Meanwhile, the US and German Ten-Year Treasury yield rose to 0.70 per cent and -0.45 per cent, respectively, after the market found itself in a "risk on" state.

The dollar weakened by 0.4 per cent compared to other currencies, with the Canadian dollar performing the strongest

Jitipol advised investors to monitor a key European Central Bank (ECB) meeting today.

He said the baht strengthened in line with a recovering capital market. Moreover, foreign investors made strong purchases of Thai bonds.

He expected the Thai currency to trade in a narrow band before the ECB meeting.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht strengthens but all eyes on FOMC meeting

The baht opened at 31.30 to the US dollar on Tuesday (September 15), strengthening from Monday's close of 31.33.

The Thai currency is likely to move between 31.20 and 31.40 on Tuesday, said Jitipol Puksamatanan, head of markets strategy at SCB Securities.

On Monday night, the financial markets were in risk-on state, with the S&P 500 rising by 1.27 per cent and Stoxx 600 going up by 0.1 per cent.

The buoyancy was mostly because of a recovery in tech stocks, which had seen a sharp downturn last week. WTI crude oil price was down by 0.2 per cent, after Oil and Petroleum Exporting Countries predicted that oil demand would not regain high levels in 2021.

Bonds moved in a narrow range, while the dollar on Monday night weakened by 0.3 per cent. The yen strengthened to 105.7 yen per US dollar, after Yoshihide Suga was chosen as Japan's new prime minister.

In Thailand, the baht weakened after foreign investors decided to reduce the baht in their hands. However, SCB's chief investment office saw this movement as not very important in the financial market, and would review the situation after the US Federal Open Market Committee meeting this week.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht strengthens to its highest against the dollar in over nine months

The baht opened at 30.78 to the US dollar on Friday, strengthening from 30.88 at close on Thursday.
The Thai currency is likely to move between 30.70 and 30.90 on Friday, said Jitipol Puksamatanan, senior director of the chief investment office at SCB Securities.

Amid the US election, the S&P 500 and Stoxx 600 increased by 1.9 and 1 per cent, respectively. The US Federal Open Market Committee approved a freeze in interest rate at zero to 0.25 per cent.

This approval could also freeze the Two- and Ten-Year Treasury yields at 0.14 and 0.76 per cent from the previous day.

At the same time, the US initial jobless claims announced this week decreased to 751,000 positions. Total claims were 7.2 million people.

In the financial market, the dollar fell by 1.1 per cent, while the dollar index reached its lowest level since October 21. This factor supported the gold price to $1,946 per ounce.

In Thailand, the baht in the short term strengthened in line with other Asian currencies. The 30.80 per US dollar on Friday morning was the strongest rate since January 28.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

Johnnie F.

It'll gain even more against the dollar with Biden winning.

thaiga

and the weak baht   ;)

Bank of Thailand 'has tools to handle strong baht'
Thailand's central bank has the necessary policy tools to handle the strengthening of the baht, the finance minister said on Monday, as the currency hit its highest level in more than 10 months against the US dollar.

The baht's strength has been driven by foreign inflows, partly due to optimism over the fundamentals of Southeast Asia's second-largest economy, Arkhom Termpittayapaisith told reporters.

After discussing the baht with the Bank of Thailand, Mr Arkhom said the central bank should have the policy measures to manage it.

"In managing the baht, monetary policy and fiscal policy must go together... and what to be aware of during capital inflows is speculation," Mr Arkhom said.

Governor Sethaput Suthiwartnarueput told his first briefing last month that the central bank would encourage capital outflows to help ease pressure on the baht as the policy interest rate was already low with limited room to fall further.

The central bank is expected to keep the key rate unchanged at a record low of 0.50% when it meets on Wednesday.

The baht was trading at 30.18 per dollar at 2.04pm on Monday, having hit 30.13 in earlier trade, the strongest since January.

Mr Arkhom said the economy in the fourth quarter should perform better than the previous quarter following government stimulus to bolster consumption.

In the third quarter, gross domestic product declined a less than expected 6.4% from a year earlier, while posting better than expected 6.5% growth on the quarter as domestic activity improved after coronavirus curbs were eased.

That prompted the state planning agency to raise its 2020 economic outlook to a 6% drop from a previous forecast for a 7.3-7.8% contraction.

bangkokpost.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht weakens just before BOT monetary policy meet
The baht opened at 30.19 to the US dollar on Wednesday, weakening from 30.16 at close on Tuesday.

The Thai currency is likely to move between 30.10 and 30.30, said Jitipol Puksamatanan, senior director of the chief investment office at SCB Securities.

On Tuesday night, the US stock market decreased. The S&P 500 contracted by 0.5 per cent, while the Stoxx 600 was down by 0.2 per cent due to investor concern about the Covid-19 situation.

At the same time, the US financial market went into a "risk-off" state again after Federal Reserve Chairman Jerome Powell said Covid-19, for which a vaccine was nearing development, would not affect the economy in the long term. However, he added that employment would take a long time to recover to its normal level.

The US Ten-Year Treasury yield meanwhile decreased by 3.4 basis points to 0.87 per cent, and the dollar weakened by 0.1 per cent, compared to other main currencies.

In Thailand, the baht moved in a narrow range before the Bank of Thailand's monetary policy committee was due to meet on Wednesday.

Observers believe the central bank will implement more relaxed monetary measures to stimulate the economy, but these policies may tend to weaken the baht, Jitipol said.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

BoT prepares more baht measures
Moves target both short and long terms

The Bank of Thailand stands ready to implement additional measures to manage the strengthening baht under a targeted policy, on both a short-term and long-term basis.

The central bank's Monetary Policy Committee (MPC) has expressed concerns over the rapid appreciation of the baht as this affects the fragile economic recovery.

"The Bank of Thailand has several instruments to manage the baht. We will consider additional targeted measures and implement them continuously to manage the exchange rate for both the short and long term," said MPC secretary Titanun Mallikamas.

The central bank has continued to manage the movement of the exchange rate reflecting rising international reserves. Thailand's foreign reserves were registered at US$252 billion (7.7 trillion baht) as of Nov 6, up from $249 billion logged on Oct 30.

In 2019, the central bank lowered the cap on the outstanding balance of a non-resident account from 300 million baht per person to 200 million, an attempt to tamper inflows of short-term inflows speculating on the baht.

The US presidential election and progress on a Covid-19 vaccine have induced a risk-on sentiment, subsequently attracting foreign capital inflows to move into emerging markets across the globe, he said.

These developments have caused the baht to appreciate, although the currency has registered a year-to-date depreciation against the US dollar, said Mr Titanun.

The baht has strengthened by 4.3% against the greenback since the last MPC meeting on Sept 23.

The local currency appreciation ranks third after the Indonesian rupiah (5.3%) and Korean won (5.2%).

On a year-to-date basis as of Nov 17, the baht depreciated by 0.6% against the dollar, ranked third for currency depreciation against the greenback after the Indian rupee (-4.2%) and the rupiah (-0.8%).

Amid a severe impact caused by the Covid-19 outbreak globally, particularly between March and May, substantial capital outflows were seen in the Thai stock and bond markets, said Mr Titanun.

The firmer dollar during the period also induced the depreciation of other currencies, including the baht.

Offshore fund flows started to return to the Thai capital market this month.

The seven-member rate-setting panel will closely monitor developments in the foreign exchange market and capital flow movement.

The MPC voted unanimously on Wednesday to maintain the benchmark policy rate at 0.5% to support economic recovery.

Despite the better than expected third-quarter economic performance, the economy is expected to recover slowly and needs support from the loosening policy interest rate, said the MPC.

Since the economic recovery will remain fragile and marred by uncertainties, the MPC wants to preserve the limited policy space to act at the appropriate and most effective time.

The committee will also monitor the adequacy of stimulus measures and various risks, including political uncertainties, progress of protocols for admitting foreign tourists and financial position of businesses and households, in deliberating monetary policy.

bangkokpost.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

BOT's move to rein in rising baht not working: experts
Analysts are sceptical about the central bank's latest measures to curb the rising baht, despite praise for the move from business quarters.

The Bank of Thailand (BOT) on Friday announced measures to encourage capital outflow in order to restrain rapid appreciation of the baht.

However, foreign funds continued to flow into the Thai stock exchange on Friday, with foreign investors making net buys of Bt2.38 billion.

"It seems that the market is not reacting, the measures seem to be more of the same old thing," Kobsidthi Silpachai, head of capital markets research at Kasikornbank, told The Nation.

Though the central bank was encouraging capital outflows, it had not imposed "scary" measures like Tobin tax [on currency conversions], he said.

Thus he was pessimistic the measures would slow down the baht's rise.

"The fundamentals have not changed: our current account will remain in surplus," he said.

While the new measures may address the "symptoms", they would not cure the underlying cause of the strong baht – an imbalanced economy, he argued.

After years of relying on monetary measures, it was time to try fiscal measures like tax reform, he added.

He was also sceptical of the BOT's recent move to loosen restrictions on foreign currency deposit accounts. Focusing on foreign capital flows might not be effective, as exporters need to convert their US dollar revenue to baht for working capital, he said.

The measure risked upsetting long-term inflation management by spurring outflow of capital and indirectly discouraging investment in Thailand, which would dampen future economic activity and inflation, he warned.

He suggested that if authorities really want the baht to weaken, they need to rebalance the economy. This is where tax reforms comes in, because high taxes, high household debt and a strong baht are all related.

"Excise tax on imported goods is high, suppressing imports and forcing the current account surplus even higher, which leads to a strong baht," he said.

US President Donald Trump has proven that cutting taxes actually boosts tax revenue, because the tax base increases, Kobsidthi added.

Naris Sathapholdecha, executive director at TMB Analytics, shares a similar view, saying that foreign investors were undeterred by the latest measures as they still bought short-term bonds worth US$700 million in Friday's intra-day trading.

He suggested that to rein in the baht, the central bank should reduce its issuance of short-term bonds. The BOT could also raise costs for foreign investors investing in Thai stocks and bonds by stipulating they must buy insurance against baht exchange rate risk.

He predicted a slight short-term weakening of the baht due to two factors outside Thailand. First, while the more trade-friendly Joe Biden had wo the US presidential election, his Democrat Party had not won a majority in the Senate. Second, a Covid-19 vaccine may not be available as soon as expected. Therefore, investors may sell Thai assets.

The baht would stay at around Bt30.50 per dollar and is unlikely to strengthen beyond Bt30, Naris added.

Meanwhile, Kriengkrai Thiennukul, vice chairman of the Federation of Thai Industries, expressed support for the BOT's moves.

"The action of the central bank will prevent a rapid rise beyond the Bt30/dollar level. Doing nothing would have seen the baht appreciate further, making Thai exports even less competitive," he said.

The baht's rise would also benefit Thai investors seeking to acquire businesses in Europe, where many companies are expected to go bankrupt amid the second wave of Covid-19. But foreign businesses could yield high returns when the pandemic eases.

He also predicted the baht would remain strong for the  foreseeable future since the Biden presidency will inject more money into US economy.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht could touch 30.20 to the dollar by year-end
The baht opened at 30.34 to the US dollar on Tuesday, weakening from 30.28 at close on Monday.

The Thai currency is likely to move between 30.25 and 30.45, said Jitipol Puksamatanan, senior director of the chief investment office at SCB Securities.

On Monday night, the S&P 500 index rose by 0.6 per cent, due to positive reports on development of a Covid-19 vaccine.

Meanwhile, WTI crude oil price increased by 1.1 per cent to the highest point since late September. Gold price shrank by 1.9 per cent.

In Europe, the Stoxx 600 index fell by 0.2 per cent, as investors are wary of investing in the region in the post-coronavirus era.

In the financial markets, the dollar strengthened by 0.2 per cent, compared to the other main currencies.

The US Ten-Year Treasury increased by 3 basis points to 0.85 per cent.

In Thailand, the baht weakened due the present dollar situation. Jitipol predicted that the baht at the end of this year would strengthen to 30.20 to the US dollar, supported mainly by capital inflows.

nationthailand.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

up down, up down, more up than down  :cussing

Bank of Thailand to unveil measures to contain baht
The Bank of Thailand (BoT) will hold a briefing on Dec 9 to unveil additional measures to contain the baht, an official said on Monday, blaming both short- and long-term factors for the currency's strength.

The measures to be implemented in the first quarter of next year will be aimed at adjusting the baht and the financial market environment, said Chayawadee Chai-Anant, a senior director at the BoT.

The baht had been "quite volatile" after factors such as progress developing a Covid-19 vaccine attracted fund inflows, she said, adding the central bank was "monitoring it 24 hours" a day.

"Short term inflows have increased, but they can't be classified as hot money or short-term investment for liquidity management," Ms Chayawadee said

The baht traded at 30.27 per US dollar on Monday, after hitting its highest level in more than 10 months of 30.13 on Nov 16.

Earlier this month, the BoT announced a series of steps to deal with the rise of the baht, which the central bank said had undermined the country's economic recovery.

Southeast Asia's second-largest economy still had momentum in the fourth quarter, supported by government stimulus measures, Ms Chayawadee said.

But the pace of recovery might not be as strong as in the third quarter, when economic activity resumed after the easing of coronavirus restrictions, she said.

The economy contracted a less than expected 6.4% in July-September from a year earlier after the June quarter's 12.1% slump.

In October, the economy contracted at a faster rate compared with the previous month due to fading temporary factors, such as special long holidays, and coming off last year's high base, the BoT said in a statement.

bangkokpost.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

EMERGING MARKETS-Thai baht hits 7-yr peak as investors see c.bank resistance slipping
(Reuters) - The Thai baht jumped to a more than seven-year high and breached a major resistance level on Thursday, as investors bet the country's inclusion on a U.S. currency watch list might weaken the central bank's determination to slow the currency's gains.

The baht THB=TH firmed 0.6% to 29.83 per U.S. dollar. Thai exporters last week had called on the central bank to ensure the baht did not appreciate beyond the 30 per dollar mark, which is critical to keep them globally competitive.

The Bank of Thailand said it did not see a big impact on foreign trade and investment after the country was added to a U.S. currency monitoring list along with Taiwan and India.

It added it had conducted two-way intervention only to ride out currency volatility and had no intention of using the exchange rate to gain an unfair trade advantage.

nasdaq.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Exchange rates tipped for shaky 2021
Volatility and malleability are key themes for this year's foreign exchange outlook, with the baht projected to appreciate further, fuelled by Thailand's surpluses in trade and current accounts, say economists.

The baht breached 30 per US dollar near the end of 2020 and hovered around 29.9 against the greenback early this month, before retreating to 30 as of press time on Thursday.

Net foreign inflows worth 725 million baht in the domestic stock market for the month to date are one of the main factors contributing to the baht's strengthening value.

Despite the pandemic slowing the economy, Thailand's trade balance is still in surplus because of low manufacturing output domestically, said Mr Nipit.

"Imports of machineries and raw materials have plummeted significantly, declining more than Thai exports have slowed down," he said.

The constant current account surpluses also reflect a low investment ratio in the country, whereby low investment is tantamount to lower imports, said Mr Nipit.

Foreign inflows moving into the domestic bond and stock markets have been fuelled by Thailand's current account surplus, high foreign reserves, manageable public debt and the 0.5% policy interest rate, he said. Negative inflation is another factor contributing to the baht appreciation.

Thailand's headline inflation contracted by 0.27% in December compared with a 1.2% expansion of the US consumer price index in the same month. This reflects Thai products are cheaper than US counterparts, subsequently enticing more demand for local products, said Mr Nipit.

The baht will encounter some challenges going forward, according to the latest edited minutes of the Bank of Thailand's Monetary Policy Committee (MPC).

The MPC has assessed that a risk-on sentiment will continue to prevail in the global financial markets in the short term and the US dollar is expected to depreciate subsequently.

These developments will subsequently lead to a rapid appreciation of the baht, which could affect the fragile economic recovery. The MPC believes a new foreign exchange system should be expedited to address structural problems in the foreign exchange market and encourage more balanced capital flows.

Wasin Rojayaroon, assistant director of the economic and policy department at the Bank of Thailand, said this year's foreign exchange outlook will be marred by high volatility on the back of the pandemic and excess liquidity coming from a dovish monetary policy adopted by global central banks.

Malleability is another key theme. Based on the central bank study, the baht's value is influenced by movement of foreign currencies at 85%, with the remaining 15% attributed to other factors, said Mr Wasin.

The baht has an appreciation outlook because the country has recorded continuous current account surpluses since 1997, said Nipit Wongpunya, an associate dean at Chulalongkorn University's economics faculty.

bangkokpost.com
Anyone who goes to a psychiatrist should have his head examined.

thaiga

Baht weakens but all eyes on direction of Asian markets
The baht opened at 30.17 to the US dollar on Tuesday, weakening from 30.15 at close on Monday.

The Thai currency is likely to move between 30.12 and 30.32, said Jitipol Puksamatanan, the head of the "Easy Invest" team at SCB Securities.

On Monday night, the financial markets were stirred by investors selling stocks that grew at the beginning of this year.

Some observers are concerned about the ban on Donald Trump by social media companies, raising questions about the limits of these companies' powers.

The Nasdaq index fell by 1.25 per cent, while the S&P 500 and Stoxx 600 dropped by 0.6 and 0.7 per cent, respectively.

The risk-off situation of the market strengthened the dollar to its highest level in the past three weeks, while the Australia and New Zealand dollars weakened by 0.6 and 0.9 per cent respectively.

The price of Bitcoin also dropped by 8 per cent to $35,500, and the US Ten-Year Treasury yield decreased by 1 per cent to 1.13 per cent.

Jitipol added that the price of WTI crude oil and gold had changed slightly on Monday.

In Thailand, the baht weakened, pressured by the stronger dollar, prompting foreign investors to sell risk assets in Thailand for speculation.

On Tuesday, he advised investors to monitor capital markets, explaining that a change in Asian markets could pressure the baht and other currencies in emerging markets to continually weaken.

bangkokpost.com

Anyone who goes to a psychiatrist should have his head examined.

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