This morning, the baht weakened, opening at 34.45 baht/dollar. The market is worried that the Fed will move forward with raising interest rates.

The baht opened this morning at 34.45 baht per dollar. Weakened from the previous day's closing level of 34.32 baht per dollar.

Mr. Poon Panichpibul, Money and Capital Strategy Officer at Krungthai GLOBAL MARKETS, Krungthai Bank, revealed that the Thai baht opened this morning at 34.45 baht per dollar, weakening from the previous day's closing level of 34.32 baht per dollar.

During the previous night, the value of the baht fluctuated and weakened as we had assessed. (Oscillating in the range of 34.31-34.55 baht per dollar) After the dollar and the 10-year bond yield, the United States has an upward trend. Following concerns about the Fed's tendency to continue raising interest rates. According to a statement by Thomas Barkin, president of the Richmond Fed, that signals The Fed still has a chance to move forward with raising interest rates. to control the inflation problem successfully

In addition, the rise of the dollar and the 10-year bond yield have put pressure on the United States. Gold prices dropped, breaking out of the support zone that we assessed.

However, some market players still buy gold in a short period of time. After the atmosphere in the financial market returned to being more risk-off, the aforementioned gold transaction flow also contributed to pressure on the baht to depreciate.

Regarding the Thai baht's outlook, we maintain our previous view that the baht remains at risk of volatility and weakening. This is due to market participants' increasing uncertainty regarding the Federal Reserve's interest rate outlook, including concerns that the Fed may continue to raise interest rates (based on the recent statement from the Richmond Fed president) and that the Fed may not rush to lower rates as the market has anticipated.

by such picture It has supported the dollar to still have a chance to gradually strengthen. Especially if the US economic data report tonight comes out better than expected, reflecting that the US labor market Still going strong

Furthermore, the recent correction in gold prices may create opportunities for some market players to gradually buy gold during dips, and such transaction flows contribute to the weakening of the Thai baht.

At the same time, the situation in the Middle East is heating up. and the trend of crude oil supply that may be tight in the short term. from the closure of oil wells in Libya It may encourage the price of crude oil to have a chance to increase. which in such a moment The baht may also come under pressure from the flow of oil purchasing transactions by market players.

and in addition to the above factors The risk-taking situation of the financial market could easily affect the Thai stock market. As a result, foreign investors may gradually sell to make some profit from the latest rebound of the Thai stock market.

However, the selling pressure of Thai stocks by foreign investors may be slowed down somewhat. From the bond purchasing flow of some market players who still believe The baht will tend to gradually strengthen. Especially at a time when the baht has depreciated close to the important resistance zone of 34.50 baht per dollar.

Makes us evaluate that The baht may not have depreciated far beyond this resistance level yet. Until the market recognizes new factors such as the total non-agricultural employment (Nonfarm Payrolls) this Friday night.

Currently, we observe that the volatility of the Thai baht remains higher than its historical average (as viewed from the weekly baht trading range). Therefore, we maintain our recommendation that businesses should utilize a variety of hedging tools, such as options, to enhance their effectiveness in mitigating exchange rate risks.

And in addition to using the aforementioned tools Choosing to transact in local currency is another interesting way to manage exchange rate risk. Entrepreneurs should compare transaction costs and hedging plans before making every decision.

Looking at the baht today It is expected to be at the level of 34.30-34.60 baht/dollar.

The concerns about the Federal Reserve's interest rate hike prospects, stemming from statements by the Richmond Fed president, have pressured market participants in the US stock market to continue selling tech and growth stocks.

Such as Tesla -4.0%, Nvidia -1.2%. The US stock market There is still some support from the increase in energy stocks Chevron +1.9%, Exxon Mobil +0.8% after crude oil prices rose by more than +4.3%, causing the overall S&P500 index to close the market at -0.80%.

Meanwhile, in European stock markets, the STOXX 600 index continued its decline by -0.86% amid uncertainty surrounding the Federal Reserve's monetary policy direction.

Including concerns about the recovery trend of the Chinese economy. This causes market players to continue selling tech stocks, growth style stocks and brand name stocks such as ASML -2.9%, LVMH -3.8%.

The European stock market is still supported by an increase in Defensive stocks such as Healthcare such as Roche +4.4%.

In the bond market, the 10-year US Treasury yield surged above 4.00% following statements from the Richmond Fed president, raising concerns among market participants that the Fed may still raise interest rates if inflation does not slow down significantly as desired.

However, US economic data reports which came out mixed (ISM manufacturing sector index came out better than expected But the number of job openings or Job Openings came out worse than expected) as well as the risk-taking condition of the financial market, causing the US 10-year bond yield to shrink somewhat, to the level of 3.90%.

Moreover, although we maintain the same view that Bond yields have entered a downtrend. But there is still some fluctuation. Especially at a time when market players are starting to be unsure about the Fed interest rate trend. Just like what had just happened the night before.

Therefore we still recommend that Market players should focus on Buy on Dip strategies and not chase prices. By trying to take into account the break-even point or break-even when considering the total return or total return that will be obtained from holding bonds.

In the currency market, the US dollar strengthened against major currencies due to concerns about the Federal Reserve's continued interest rate hikes and increased demand for the dollar as a safe haven asset during periods of risk aversion in financial markets. Overall, the dollar index (DXY) rose to 102.5 points (fluctuating between 102.2 and 102.7 points).

Regarding gold prices, the upward movement of both the US dollar and 10-year US Treasury yields has pressured gold prices (COMEX gold futures for February delivery) to gradually decline to $2,040 per ounce (below the support zone we estimated).

As a result, some market players may gradually buy gold in those zones. This transaction flow also contributed to some pressure on the baht's volatility to depreciate last night.

For today, market players will wait for the report of important US economic data, including private sector employment totals by ADP that may reflect the trend of non-agricultural employment (Nonfarm Payrolls) this Friday, including totals. People applying for unemployment benefits (Jobless Claims), especially the total number of people applying for unemployment benefits (Continuing Jobless Claims).

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