The baht opened this morning at 32.90 baht/dollar

The Thai baht opened this morning at 32.90 baht per dollar, slightly weaker and virtually unchanged from the previous day's closing level of 32.88 baht per dollar.

On August 28, 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 32.90 baht per dollar, slightly weaker and virtually unchanged from the previous day's closing level of 32.88 baht per dollar.

Since overnight, the Thai baht (USDTHB) has moved without a clear direction in a sideways range (fluctuating between 32.85-32.91 baht per dollar), despite receiving some strengthening support due to a slight weakening of the US dollar.

However, uncertainty surrounding a ceasefire between the US and Iran, following President Donald Trump's continued assertion that the US is not in a hurry to negotiate with Iran and that he does not wish to meet with Iran at this time, has fueled a renewed rise in crude oil prices (most recently, Brent crude has climbed to the $88-89 per barrel zone), putting further pressure on the Thai baht.

Furthermore, month-end dollar buying flows continue to be another factor pressuring the Thai baht. However, the weakening of the dollar remains limited as market players await statements from Federal Reserve Chairman Kevin Warsh at the Jackson Hole Symposium on Friday night, Thailand time.

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 remain in a sideways range, with key resistance around 33.00 baht per dollar. Support is seen around 32.65 baht per dollar (with further support at 32.50 baht per dollar and around 32.30 baht per dollar, near the 200-day moving average). Market participants may be awaiting statements from Fed Chairman Kevin Warsh at the Jackson Hole Symposium before making any significant adjustments to their positions.

Furthermore, towards the end of the month, the Thai baht continued to face weakening pressure due to monthly dollar-buying flows from market participants. Therefore, we believe the baht will not be able to appreciate significantly until we see a shift in market sentiment regarding the Fed's interest rate outlook, which might occur after the Fed Chairman's statement.

However, we are concerned that market players may be disappointed by the FED Chairman's statements, which may not provide a clear signal about the future direction of monetary policy. This could once again put pressure on financial markets regarding the FED's credibility, potentially reflected in a rise in the term premium of long-term US bonds, pushing up long-term US bond yields. If market players do not increase their likelihood of the FED raising interest rates accordingly, we believe this could put downward pressure on the dollar, support higher gold prices, and potentially strengthen the Thai baht.

However, if the Fed chairman sends a clear signal, similar to what Fed officials have been expressing recently—that monetary policy is not tight enough to control inflation and that the Fed should proceed with interest rate hikes—we believe market participants will become more confident about the Fed's interest rate hike prospects. This could lead to an increased likelihood of two Fed rate hikes this year, boosting the dollar and US bond yields (especially short-term yields), which would put considerable pressure on both gold prices and the Thai baht. In this scenario, the baht risks weakening and potentially testing/breaking through the resistance zone of 33.00 baht per dollar.

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 32.65-33.05 baht/dollar.

US stock market

Nvidia's better-than-expected earnings report, up 8.7%, boosted most AI/semiconductor themed stocks and helped support the rise in the US stock market, even though overall financial market sentiment was somewhat weighed down by uncertainty surrounding the situation in the Middle East.

Furthermore, market participants are awaiting statements from the Fed chairman before making any clear position adjustments. As a result, the Dow Jones index rose +0.20%, the S&P 500 closed up +0.72%, and the Nasdaq Composite surged +1.57%.

european stock market

On the European stock market side, the STOXX 600 index fell by more than -0.69%, pressured by political issues in France. This was reflected in the decline of the French CAC 40 index by -1.68%, a larger drop than other European stock market indices.

However, European stock markets still received some support from gains in some AI/semiconductor themed stocks, as well as gains in military and aerospace stocks such as Rheinmetall (+3.0%) amid the ongoing Russia-Ukraine conflict. The situation in the Middle East, however, remains highly uncertain.

Bond Market

In the bond market, the 10-year US Treasury yield traded sideways around 4.67% as market participants awaited statements from the Federal Reserve Chairman at the Jackson Hole Symposium. Signals from the options market suggest that the 10-year US Treasury yield could fluctuate by at least 10 basis points after the statement is released.

Furthermore, we maintain our previous recommendation that market players can gradually purchase long-term US (and Thai) bonds, especially if the 10-year US bond yield rises again, such as testing or breaking through the 4.70% zone. This is because we maintain 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 will wait to see the statements from the Fed chairman at the Jackson Hole Symposium, as well as key US economic data reports, before adjusting our view on the Fed's interest rate outlook if necessary.

currency market

In the currency market, the dollar edged slightly lower, pressured by some strengthening major currencies, particularly the Japanese yen (JPY). The JPY benefited from market adjustments after failing to maintain its weakening form, and some market participants continued to anticipate a Bank of Japan (BOJ) interest rate hike in September.

However, the weakening of the dollar was limited by uncertainty in the Middle East and market players' anticipation of statements from the Fed chairman before making clear adjustments to their holdings. Overall, the dollar index (DXY) retreated to the 99.1 point zone (the DXY index fluctuated around 99.0-99.3 points).

Regarding gold prices, although the dollar showed some weakness, uncertainty in the Middle East, coupled with risk appetite in the US stock market and market participants awaiting statements from the Federal Reserve Chairman, limited gold prices (COMEX gold futures for December 2026 delivery) to a sideways range around $4,620-$4,670 per ounce.

Over the next 24 hours, the key highlight will be the statement by Federal Reserve Chairman Kevin Warsh at the Fed's annual Jackson Hole symposium, which will be gradually released around 9:00 PM Friday night, Thailand time. We assess that market participants may be disappointed with the Fed Chairman's statement, as it may not signal the future direction of the Fed's monetary policy, consistent with the gradual reduction in the role of forward guidance since Chairman Kevin Warsh took office.

However, the Fed Chairman may primarily be referring to the framework for making monetary policy decisions, especially after the appointment of five task forces to review the Fed's operations. We are concerned that if the Fed Chairman does not signal monetary policy as the market expects, it could create volatility in the financial markets.

On the Thai side, market players are awaiting the July Industrial Production Index (MPI) and Capacity Utilization reports, which could provide a glimpse into the trends in Thailand's manufacturing sector.

In addition to the factors mentioned above, market participants will be monitoring developments in the Middle East following the resumption of negotiations between the US and Iran, which remain highly uncertain. Simultaneously, market participants will be awaiting earnings reports from listed companies and the movements of AI/Semiconductor themed stocks, which could create volatility in financial markets.