The value of the baht opened this morning at 32.00 baht/dollar

The baht opened this morning at 32.00 baht to the dollar, slightly stronger and almost unchanged from the previous day's close of 32.04 baht to the dollar.

3 Dec 2568 Mr. Poon Panichphibun, money market strategist, Krungthai GLOBAL MARKETS, Krung Thai Bank revealed that The baht opened this morning at 32.00 baht to the dollar, slightly stronger and almost unchanged from the previous day's close of 32.04 baht to the dollar.

Since last night, the baht (USDTHB) has been moving without a clear direction, hovering around the 32.00 baht per dollar zone (fluctuating between 31.98 and 32.09 baht per dollar). Although there have been some weaknesses, approaching the 32.10 baht per dollar zone, following the decline in gold prices (XAUUSD), which faced profit-taking from market players after the overall financial market resumed risk-taking, driven by hopes for a Fed interest rate cut at this December's meeting.

Market players are confident (Fully Priced-In) that the Fed will be able to proceed with a 25bps interest rate cut. This view of market players has also put pressure on the dollar to gradually weaken again and has helped support the gold price to fluctuate around the $4,200 per ounce zone.

สำหรับ Trend of the baht value We continue to assess that the Thai baht (USDTHB) is likely to gradually strengthen, testing the 32.00 baht per dollar level or possibly surpassing it by the end of the year. However, in the short term, the baht's appreciation remains limited due to both dollar (and other currencies such as the Japanese yen) buying flows and adjustments in holdings by some market players.

Meanwhile, market players may not rush to adjust their holdings, particularly significantly increasing their short USD positions (seeing a weaker dollar), until they receive key US economic data releases ahead of the Fed's FOMC meeting. Importantly, we believe market players may await the outcome of the Fed's FOMC meeting and the BOJ meeting before making significant adjustments to their holdings, both their short USD and their short JPY positions (seeing a weaker Japanese yen). This suggests that the dollar could begin to fluctuate within a sideways range during this period.

This Wednesday night and into the weekend, market players will be wading through key US economic data releases, particularly on the labor market, which could significantly alter market views on the Fed's interest rate outlook ahead of next week's FOMC meeting.

We are concerned that if the US employment data report, along with other key economic data such as the ISM Services PMI, comes out better than expected, it could cause market players to lower their expectations for a Fed rate cut. This could significantly boost both the US dollar and the US 10-year bond yield, putting pressure on both gold prices and the Thai baht.

The baht may weaken by around 15-20 satang per dollar following the release of this economic data. Therefore, we would like to emphasize that market players should be wary of volatility as the market gradually absorbs the release of US economic data starting tonight (these data will gradually be released around 8:15 PM Thailand time).

We assess that the baht's volatility is at risk of increasing and at least above its historical average. Amid the uncertainty surrounding market players' shifting perceptions of the Fed's interest rate outlook and other major central banks, the ongoing US political landscape, including the potential government shutdown (which could return in early 2026), and the Supreme Court's ruling on import tariffs, we believe that market players should adopt options strategies or consider using local currencies to enhance their exchange rate risk management.

Looking at the baht's range in the 24 hours, it is expected to be at 31.90-32.15 baht/dollar.

US stock market

US stock market players are increasingly taking on risk, driven by hopes of a Fed rate cut, which has helped tech stocks in the AI/semiconductor theme rebound somewhat after the previous day's decline, led by Apple (+1.1%) and Nvidia (+0.9%).

However, the US stock market faced some pressure, following declines in healthcare and energy stocks. The S&P 500 closed up 0.25%, while the Nasdaq tech index rose 0.59%.

european stock market

On the European stock market side, the STOXX600 index rebounded +0.07%, supported by a slight rebound in tech stocks with the AI/Semiconductor theme, which benefited from expectations of a Fed rate cut, and stocks in the military and aviation industries, which may only be a technical rebound after facing continued selling pressure from the peace negotiations to end the Russia-Ukraine war.

However, European stock markets faced selling pressure from energy and consumer goods stocks, particularly luxury goods, which may be sensitive to the European Central Bank's (ECB) interest rate outlook, after the Eurozone's CPI inflation rate in November rose to 2.2%, higher than market expectations.

Bond Market

In the bond market, the US 10-year bond yield continues to move in line with financial market conditions and market players' views on the Fed's interest rate outlook, although the gradual risk-taking in financial markets has put some pressure on the US 10-year bond yield.

However, the upward adjustment was limited by market players' views that remain confident that the Fed is still likely to continue cutting interest rates at its December meeting and may proceed with another 2-3 rate cuts next year. As a result, overall, the US 10-year bond yield is still fluctuating around the 4.09% zone (range 4.08%-4.12%).

We reiterate that the US 10-year bond yield may fluctuate during this period, based on changing market views on the Fed's interest rate outlook, overall financial market conditions, and the Supreme Court's ruling on US import tariffs (which will affect market views on the US government's fiscal outlook).

However, we maintain our view that if US bond yields continue to rise, market players should wait for a rise in long-term US bond yields to gradually buy (emphasizing a buy-on-dip strategy and not chasing the price). This is because we expect the Fed to continue cutting interest rates three more times, each by 25 basis points, to reach 3.25%. Consequently, we may still see a decline in the US 10-year bond yield from its current level to 3.80%-3.90% in the first half of next year, before the US 10-year bond yield gradually rises to 4.20% again by the end of 2026.

currency market

On the currency market side, the dollar gradually weakened again as market players expressed confidence in the Fed's continued interest rate cuts, particularly at the December FOMC meeting.

Meanwhile, market players' increasingly risk-averse attitudes have diminished the appeal of holding the dollar, leading to a gradual decline in the overall dollar index (DXY) towards the 99.3 point range (fluctuating between 99.3 and 99.6 points).

Regarding gold prices, the gradual upward movement of both the US dollar and the 10-year US Treasury bond yield, coupled with the risk appetite of the US financial market, continue to be limiting and pressuring the upward movement of gold prices (COMEX gold futures contracts for delivery in February 2026).

However, gold prices are still receiving some support from market players who are confident in the Fed's interest rate cut prospects, causing the gold price to still fluctuate around the $4,250 per ounce zone.

Over the next 24 hours, key highlights will be US economic data releases, including the November ADP private payrolls, the November ISM Services PMI, and September Industrial Production. These releases could significantly impact market players' views on the Fed's interest rate outlook and potentially create volatility in financial markets.

In Europe, market players will be awaiting statements from European Central Bank (ECB) officials, particularly the ECB President, to assess the outlook for the ECB's monetary policy.

In Asia, market players will be awaiting the release of China's RatingDog Services PMI (formerly Caixin Services PMI) for November, as well as Thailand's CPI inflation report for November. We estimate that Thailand's inflation momentum may return to a slight positive trend, driven by rising food prices, particularly meat, fresh vegetables, and fruit. This could lead to an overall increase in inflation, though it remains negative, around -0.56% (+0.08% m/m).

And beyond the aforementioned issues, we believe that market players will be waiting to follow the developments of the Russia-Ukraine war after the US makes another attempt to end the war.