The baht opened at 35.30 baht/dollar, the trend is still weak. From domestic politics - strong selling of Thai assets

The baht opened this morning at 35.30 baht per dollar.
“Weakened slightly”
from the previous day's closing level of 35.28 baht per dollar.

Mr. Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank revealed that during the night before The baht fluctuates. There is a chance of appreciating and testing the zone of 35.18 baht per dollar. according to the increase in the price of gold (Resulting in some market players gradually selling to make a profit from the rebound of gold prices) before turning around and weakening somewhat. following the rebound of the dollar and the continuous decrease in the price of gold amidst an atmosphere in the financial market that is more open to risk.

US stock market Turn around and embrace more risk. Supported by US economic data reports which came out better than expected This despite better-than-expected economic data giving the Fed an opportunity to move forward with raising interest rates at its next meeting. But this picture is what market players have already expected. This allowed big tech stocks and AI-themed stocks to rebound strongly (Tesla +3.8%, Nvidia +3.1%), resulting in the overall Nasdaq tech stock index rising +1.65%, while the S&P500 index closed. Market +1.15%

On the European stock market side, the stoxx600 index rebounded slightly +0.05%, supported by hopes that the Chinese authorities may issue additional measures to stimulate the economy. This could have a positive impact on brand name goods and mining stocks (L'Oreal +0.8%, Rio Tinto +0.6%). However, European stock markets are still under pressure from the stance of ECB officials, who are reiterating their stance. Ready to continue raising interest rates to control the problem of high inflation

On the bond market side US economic data report which came out better than expected Including the market's exposure to risk, it has supported the US 10-year bond yield to rise closer to 3.80%. However, the US 10-year bond yield has still not been able to cross that zone. This is because market players are waiting for the bond yield to increase to gradually buy (Buy on Dip), in line with the views of many analysts. that different people think Long-term bond yields, such as the 10-year US bond yield, have a chance of gradually decreasing to a level of 3.20%-3.50% at the end of the year.

On the currency market side Although the US economic data report It will come out better than expected. But demand for holding the dollar as a safe-haven asset has decreased. according to the greater risk exposure of market players As a result, the dollar gradually weakened against major currencies. Most recently, the dollar index (DXY) is still fluctuating near the level of 102.5 points (movement range of 102.3-102.6 points last night). As for the price of gold. The atmosphere in the financial market has turned into a risk-taking situation and the increase in the US 10-year bond yield has put pressure on gold prices. (COMEX gold contract for delivery in August) shrunk down to swing near the level of 1,920-1,925 dollars per ounce. We estimate that some market players may wait to gradually buy gold in a short period and this transaction flow also contributed to the pressure on the baht to depreciate last night.

For today, we still consider Market players will be watching for statements from key central bank officials such as the president of the European Central Bank (ECB) and Federal Reserve officials. To assess the direction of monetary policy of both the ECB and the Fed.

In addition, Russian political factors will be another thing that market players will be following closely. The political turmoil in Russia may affect the direction of the Russia-Ukraine war.

For the trend of the baht value We evaluate that The baht has a chance to weaken further and may move into a higher swing zone. If the baht can depreciate and break through the first resistance level around 35.30 baht per dollar, this will happen if there is no strong selling pressure on Thai assets. The baht may not depreciate much further. This is because market players are waiting to follow important economic data from the US such as inflation, PCE and the number of people applying for unemployment benefits. at the end of the week

However, the baht may still not be able to clearly strengthen in the short term. Until we see a change in the views of market players towards the Fed's interest rate increase or the Thai political situation begins to show a clearer direction in the formation of a government. (At present there is still high uncertainty) Moreover, at the end of the month, we viewed that the baht still faced depreciating pressure from the flow of purchasing dollars or foreign currencies from importers. Initially, we consider that The first support level for the baht will be in the range of 35.10 baht per dollar. The important support level will be in the range of 35.00 baht per dollar.

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 35.15-35.40 baht/dollar.