The baht opened at 34.79 baht/dollar, moving to strengthen, keeping an eye on the BOE meeting.

The baht opened this morning at 34.79 baht per dollar.
“Appreciate”
from the previous day's closing level of 34.84 baht per dollar.

Mr. Poon Panichpibul, a money and capital market strategist at Krungthai Global Markets, Krungthai Bank, revealed that the Thai baht weakened overnight, testing the resistance zone of 34.90 baht per dollar again. This was driven by the strengthening of the dollar and buying of gold on dips near the support level, before the dollar reversed course and weakened after the market perceived that Federal Reserve Chairman Jerome Powell's statements were not significantly different from what he said during the Fed meeting.

US stock market Still in a state of risk-taking. Pressured by selling stocks in tech and growth style stocks (Tesla -5.5%, Alphabet -2.1%) after market players still believe The Fed has the opportunity to continue raising the policy interest rate. From the Fed Chairman's statement to Congress, which still reiterates his position. Continue to raise interest rates To control the problem of inflation As a result, the Nasdaq tech stock index fell -1.21%, while the S&P500 index closed the market -0.52%.

As for the European stock market, the stoxx600 index continued to decline -0.50% after market players were worried that Major central banks, especially the Bank of England (BOE), may continue to raise interest rates. According to reports, inflation remains at a very high level. which such concerns have pressured Tech stocks and growth-style stocks in Europe dropped. The same is true in the US (Adyen -1.7%, ASML -1.6%). However, European stock markets still received support from buying power stocks (BP +2.2%, Shell +1.8%) following the rebound in prices. crude oil

In the currency market The dollar has weakened against major currencies. Most recently, the Dollar Index (DXY) dropped near 102 points after market players estimated that The Fed chairman's statement to Congress was no different from his post-meeting speech. This is because the Fed Chairman continues to emphasize his stance on moving forward with interest rate increases. To control the problem of inflation The market has already acknowledged this view.

As for the gold price side Even though the gold price has a chance to adjust down and test the support zone. But the decline of both the dollar and the US 10-year bond yield after the market gradually acknowledged the Fed Chairman's statement. It has helped support the price of gold (COMEX gold contract for delivery in August) to rebound into the zone of 1,940-1,950 dollars per ounce again, which we think that some players may gradually sell to make a profit from the rebound. Wound of gold And this transaction flow also contributed to the baht's appreciation last night.

For today, the main highlight will be the results of the Bank of England (BOE) meeting. The May CPI inflation rate is as high as 8.7% (higher than the market expected and is an acceleration of inflation) will cause the BOE to raise interest rates +25bps to 4.75% with a clear signal. Continuing to raise interest rates is still necessary. (Market players expect that the BOE may raise interest rates to the level of 5.75%)

In addition, in the economic data report section Market players will wait for the report on the number of initial and continuing jobless claims (Initial & Continuing Jobless Claims) in the United States to assess labor market trends. As well as keeping an eye on statements from Fed officials. Especially the Fed Chairman's statement to Congress on the 2nd.

For the trend of the baht value We evaluate that The baht has a chance to weaken further, but we still think that The baht may not be able to weaken past the resistance zone of 34.80-34.90 baht per dollar easily as market players are waiting for the baht to weaken. To gradually take profit from short THB positions and sell dollars. For some exporters

In addition, in the evening around 18.00:34.60 p.m., the baht has a chance to gradually strengthen if the BOE decides to increase interest rates as expected. Ready to send a clear signal that Ready to continue raising interest rates several times. Until the inflation problem can be controlled successfully which such picture It will help support the British pound (GBP) to gradually strengthen. Put pressure on the dollar to weaken somewhat, but the baht may not strengthen much. We evaluate that Short-term support may be in the zone 34.70-XNUMX baht per dollar. Amid the strong purchasing power of the dollar by market players. Especially on the importer side, they will gradually start buying dollars. For transactions at the end of the month Including the purchasing power of the Japanese Yen (JPY) that has continued to depreciate during this period.

In addition, the fund flow direction of foreign investors may begin to be net sellers. Especially on the stock side After the Thai stock index continued to decline. From a clear rebound in the previous period, however, foreign investors may gradually return to purchasing more Thai bonds. After the bond yield has improved somewhat in the past And we are starting to see signs of foreign investors returning to buying more Thai bonds.

We maintain the advice that At a time when the financial market is still highly volatile due to both Thai political factors and the changing views of market players on the Fed's interest rate policy trend. Entrepreneurs should use a variety of hedging tools, such as Options, to increase efficiency in hedging against exchange rate risk.

Looking at the baht today It is expected to be at the level of 34.70-34.90 baht/dollar.