The baht opened this morning at 33.23 baht per dollar.
The Thai baht opened this morning at 33.23 baht per dollar, remaining stable and unchanged from the previous day's closing level.
On September 15, 2569, Mr. Poon Panichpibul, Money and Capital Strategy Analyst at Krungthai GLOBAL MARKETS, Krungthai Bank, revealed that the Thai baht opened this morning at 33.23 baht per dollar, remaining stable and unchanged from the previous day's closing level.
Since overnight, the Thai baht (USDTHB) has moved without a clear direction in a sideways range (fluctuating between 33.15-33.32 baht per dollar). The baht even weakened briefly, testing the resistance zone of 33.30 baht per dollar, amidst pressure from the continued rise in crude oil prices due to the ongoing tensions in the Middle East, as well as the strengthening of the US dollar amidst the overall risk-averse financial markets.
However, the Thai baht has gradually strengthened somewhat after the US dollar weakened, along with a decline in crude oil and refined product prices, such as diesel, on hopes that the conflict between Russia and Ukraine, which involved attacks on energy infrastructure in the past, might de-escalate and ease somewhat.
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 maintain our view that as long as the situation in the Middle East shows no signs of easing and energy prices remain at risk of rising, the Thai baht will face downward pressure. However, the baht's depreciation may encounter resistance around 33.30 baht per dollar (the next resistance level at 33.50 baht per dollar) as market players may still be hesitant to significantly adjust their positions, awaiting the results of this week's central bank meetings (FED, BOE, and BOJ). Furthermore, we estimate that at this level, some market participants, such as exporters, may be waiting to gradually sell US dollars.
Overall, we believe the recent risk-averse sentiment in financial markets has been fueled by concerns over AI development and investment trends, impacting AI/semiconductor themed stocks. While this has affected the Thai stock market to some extent, we believe foreign investors may be waiting for an opportune moment to gradually buy Thai stocks that are more traditionally in the old economy.
Furthermore, we believe that Thai medium-to-long-term bond yields have risen considerably and become more attractive, which may lead some foreign investors to wait for an opportune moment to gradually purchase Thai bonds. This buying of Thai assets by foreign investors could also help to slow the depreciation of the Thai baht.
However, the Thai baht is unlikely to strengthen significantly until market players reduce their concerns about the Federal Reserve's (FED) and other major central banks' interest rate hike prospects, which requires improved developments in the Middle East. In the short term, we see the baht remaining in a support zone around 33.00 baht per dollar (with the next support level at 32.75-32.85 baht per dollar).
However, we believe that market players still need to monitor the movements of both gold prices and the Japanese yen (JPY), which continue to have a significant impact on the Thai baht.
Technically, using a trend-following strategy, the Thai baht remains in an "upward" trend on the weekly timeframe, but has shifted to a "weakening" trend on the daily timeframe after clearly weakening below 33.20 baht per dollar.
Looking at the baht's range in the 24 hours, it is expected to be at 33.10-33.35 baht/dollar.
US stock market
The atmosphere in the US stock market remains risk-off due to various pressures, including concerns about the Federal Reserve's interest rate hike prospects and worries about the direction of AI development and investment. These factors are putting pressure on AI/semiconductor stocks, such as Nvidia, which fell 3.4%.
However, the US stock market still received some support from gains in major tech stocks like Alphabet (+3.2%) and defensive stocks such as healthcare and consumer goods. As a result, the Dow Jones index fell -0.29%, the S&P 500 closed down -0.48%, and the Nasdaq Composite fell -0.56%.
european stock market
On the European stock market side, the STOXX 600 index continued to fall, down -0.49%, pressured by selling in the AI/Semiconductor sector, similar to the US stock market led by ASML, which fell -6.1%.
However, European stock markets still received some support, driven by gains in the healthcare and consumer goods sectors, as well as energy stocks which continued to benefit from high energy prices.
Bond Market
In the bond market, the 10-year US Treasury yield rose above 5.00% before retracing slightly, but remains near that level. Factors pressuring long-term US bonds continue to be concerns about the US inflation outlook and the direction of the Federal Reserve's interest rate policy, as well as ongoing concerns about the US fiscal position.
However, the overall risk-averse sentiment in financial markets and the shift of market participants into long-term bond holdings have helped limit further increases in bond yields. Although the 10-year US Treasury yield has broken above 5.00%, we estimate that the current break-even yield (the level at which holding the bond from its current level begins to result in losses in terms of overall return) for the 10-year US Treasury could reach as high as 5.30%, which could support a scenario where the FED raises interest rates more frequently than the market expects (around four times within the next year).
Importantly, we believe that the FED's interest rate hike will pave the way for long-term bond yields to gradually decline over time, as the economy and inflation outlook may slow down. Furthermore, the FED may consider lowering interest rates somewhat next year, making a gradual purchase of long-term US bonds using a "buy on dip" strategy still attractive.
currency market
In the currency market, the dollar moved sideways, strengthening slightly due to risk aversion. However, the dollar weakened slightly following a dip in energy prices and a gradual recovery in the US stock market. Market participants were hesitant to adjust their positions, awaiting the results of the FOMC meeting. Overall, the dollar index (DXY) continued to fluctuate around 99.5 points (the DXY index fluctuated between 99.3-99.7 points).
Regarding gold prices, despite the overall risk-off sentiment in financial markets, market participants' concerns about the prospect of interest rate hikes by major central banks continue to pressure gold prices (COMEX gold futures for December 2026 delivery), causing them to fluctuate around $4,310-$4,360 per ounce.
Over the next 24 hours, market participants will be watching for the weekly ADP private sector employment report and the New York FED's Empire Manufacturing Index for September, along with the results of the US 20-year Treasury auction, which could create volatility in long-term US bond markets.
On the European side, the key highlight will be the UK labor market data report, including both employment figures and wage growth rates, which will impact market participants' views on the Bank of England's (BOE) monetary policy outlook. Currently, market participants believe the BOE has a 74% chance of raising interest rates five times by the end of 2027.
In Asia, market players are awaiting key monthly economic data reports from China, such as retail sales figures, and are also monitoring movements in Japanese long-term bond yields following the announcement of the 20-year bond auction results.
In addition to the factors mentioned above, market players will be closely monitoring developments in the Middle East. Simultaneously, they will be watching for movements in the Japanese yen (JPY), which could impact the financial market sentiment.
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