The Thai baht opened this morning at 32.69 baht/dollar. Attention is focused on the Monetary Policy Committee meeting, with expectations that interest rates will remain at 1%.

The Thai baht opened this morning at 32.69 baht per dollar, slightly stronger but virtually unchanged. Attention is focused on today's Monetary Policy Committee meeting, which is expected to result in a unanimous decision to maintain the policy interest rate at 1%.

On August 26, 2569, Mr. Poon Panichpibul, a money and capital market strategist at Krungthai GLOBAL MARKETS, Krungthai Bank, revealed that the Thai baht opened this morning at 32.69 baht per dollar, slightly stronger and virtually unchanged from the previous day's closing level of 32.74 baht per dollar.

Since overnight, the Thai baht (USDTHB) has gradually strengthened slightly in a sideways-down pattern (fluctuating between 32.67-32.76 baht per dollar), in response to news that the US and Iran may resume ceasefire negotiations. This has eased market concerns about developments in the Middle East, putting downward pressure on crude oil prices.

Recently, Brent crude oil prices have fallen to around $86 per barrel. This has also supported a rise in gold prices (XAUUSD) to the $4,650 per ounce zone, driven by lower expectations regarding interest rate hikes by major central banks, as well as a decline in both the US dollar and the 10-year US Treasury yield.

US stock market participants are becoming more risk-averse amid hopes of a ceasefire between the US and Iran. This has led to lower energy prices and eased market concerns about US inflation and the possibility of further interest rate hikes by the Federal Reserve. The downward trend in the 10-year US Treasury yield has also benefited tech and growth stocks.

However, the upside in the US stock market remained limited as market participants awaited statements from the Federal Reserve Chairman at the Jackson Hole Symposium, as well as Nvidia's earnings report. The Dow Jones closed up 0.30% in the after-close on Wednesday, the S&P 500 up 0.32%, and the Nasdaq Composite up 0.66%.

Regarding the outlook for the Thai baht (USDTHB), we maintain our view that the baht faces two-way risk in the short term. This depends on changes in market players' views on the Federal Reserve's monetary policy outlook, which will be influenced by developments in US economic data and the highly uncertain situation in the Middle East. Therefore, market players should employ a more diverse hedging strategy, especially options, which can significantly enhance currency risk management in this highly uncertain market environment.

During the day, we expect the Thai baht to continue trading in a sideways range. The first technical resistance zone is around the 100-day moving average, at approximately 32.80-32.85 baht per dollar. The key resistance level is around 33.00 baht per dollar. The support zone is around 32.50 baht per dollar (with the next support level at 32.30 baht per dollar, near the 200-day moving average).

We estimate that market players may want to wait and see the release of key US economic data on Wednesday night, and possibly also wait to hear statements from Fed Chairman Kevin Warsh at the Jackson Hole Symposium, before making any definitive adjustments to their holdings.

Furthermore, we believe market players should be wary of volatility as the market gradually absorbs key US economic data, particularly the PCE inflation rate, which analysts estimate may continue to slow to +3.6% y/y (+0.1% m/m), while the core PCE inflation rate may remain stable at 3.3% (+0.2% m/m).

This picture has been largely absorbed by market players since the release of the CPI and PPI inflation reports. This has led to a gradual reduction in the likelihood of the FED raising interest rates, down to only a 100% chance of one rate hike this year. Therefore, we believe we should be wary of the risk that if the PCE inflation rate is higher than expected, or even accelerates, it could cause market players to increase the likelihood of the FED raising interest rates, supporting a stronger dollar and putting considerable pressure on both gold prices and the Thai baht.

Technically, using a trend-following strategy, the Thai baht remains in an "upward" trend. However, if the baht reverses and weakens, clearly breaking through the resistance zone of 33.00 baht per dollar, it will revert to a "downward" trend on the daily timeframe. If it weakens below 33.50 baht per dollar, it will also enter a "downward" trend on the weekly timeframe.

Looking at the baht's range in the 24 hours, it is expected to be at 32.55-32.85 baht/dollar.

european stock market

On the European stock market front, the STOXX 600 index continued to rise by +0.35% as market participants became more risk-averse amid hopes for a ceasefire between the US and Iran.

Furthermore, European stock markets also received some support from the rise in AI/semiconductor stocks, similar to the US stock market, as well as the continued rise in mining stocks, which continue to benefit from the recent increase in gold prices.

European stock markets faced some pressure, driven by selling in energy stocks following a gradual decline in crude oil prices.

Bond Market

In the bond market, the 10-year US Treasury yield edged down slightly to 4.64%, following a decline in crude oil prices amid hopes for negotiations between the US and Iran.

However, the decline in 10-year US Treasury yields remains limited by concerns about the US fiscal position, as well as the issue of large numbers of AI companies issuing bonds. Furthermore, market participants are awaiting key US economic data reports and statements from the Fed chairman before making any definitive adjustments to their holdings.

However, we maintain our previous recommendation that market players can gradually purchase long-term US (and Thai) bonds, as we retain our view that the FED is likely to keep interest rates unchanged in 2026 before gradually cutting rates twice in 2027 (Q2 and Q4).

The Bank of Thailand (BOT) may keep interest rates unchanged throughout this year and next. However, we may need to revise our view on the Federal Reserve's (FED) interest rate outlook if the situation in the Middle East escalates significantly, leading to energy prices remaining high (crude oil prices exceeding or around $100 per barrel) for longer than expected.

currency market

In the currency market, the dollar gradually weakened somewhat amid hopes for a ceasefire between the US and Iran. However, the dollar's depreciation remained limited as market participants were hesitant to adjust their positions, awaiting the US PCE inflation report and the Federal Reserve Chair's statement at the Jackson Hole Symposium. Overall, the dollar index (DXY) retreated to the 98.9 point zone (the DXY index fluctuated between 98.8 and 99.1 points).

In terms of gold prices, hopes for a resumption of negotiations between the US and Iran, along with a decline in both the dollar and 10-year US Treasury yields, continue to support rising gold prices (COMEX gold futures for December 2026 delivery).

However, the upward movement in gold prices remains limited around $4,710 per ounce due to profit-taking by some market players and the overall risk-on sentiment in financial markets.

Over the next 24 hours, key highlights will include the release of the US PCE inflation report for July, as well as other important US economic data such as the second-quarter 2026 growth forecast and July's Durable Goods Orders figures.

On the Thai side, we expect the Monetary Policy Committee (MPC) to unanimously decide to maintain the policy interest rate at 1.00%, even though the economy expanded better than expected in the second quarter. However, overall, the Thai economy remains below its potential and its growth is uneven (K-shaped).

While inflation is temporarily trending upwards mainly due to supply-side factors, the widespread transmission of costs to prices of goods and services is not yet apparent, which could accelerate inflation and put medium-term inflation expectations at risk of falling outside the target range.

In addition to the factors mentioned above, market players will be watching developments in the Middle East, where signs of a resumption of negotiations between the US and Iran are beginning to emerge. However, overall, the situation remains highly uncertain.

Meanwhile, market participants will be watching for earnings reports from listed companies, especially Nvidia, which will be released during the after-close trading session of the US stock market on Wednesday night, as well as movements in AI/semiconductor themed stocks that could create volatility in financial markets.