This morning, the baht opened at 34.63 baht to the dollar. “Appreciated slightly” from the close of the previous week at 34.65 baht for every dollar. The financial market is incredibly unpredictable. When recognizing reported earnings from listed companies in the second quarter, Thai political factors and financial market conditions both played a role.
According to Mr. Poon Panichphiboon, money market strategist at Krungthai Global Markets, the baht started to weaken a little on Friday night the week before. According to the recovery, the dollar’s appreciation After the report, the University of Michigan’s consumer sentiment index (UofMichigan Consumer Sentiment) performed better than anticipated.
The dollar’s slide was reversed last week. After the market notices that the Fed is about to stop raising policy rates. This week, we believe it is best to wait for the results of the second quarter’s listed firms while also keeping a watch on Thailand’s political climate. (Round 2 of voting for prime minister)
US side: Economic data reports may not be much, according to the global economic picture. Market participants will postpone evaluating the future for the US economy. Passed a report on retail sales in June. Retail sales may increase by 0.5% over the previous month, according to estimates. fueled by auto sales Retail Sales Ex. Auto & Gas, on the other hand, may only gain +0.1%m/m, indicating that US consumers started to cut down on spending. In addition to the economic data report, luxury products fall under the Consumer Discretionary category. Market participants will pay particular attention to the earnings announcements of listed firms. Large financial organizations and tech firms like BofA, Morgan Stanley, ASML, Netflix, Tesla, and TSMC are just a few examples.
Europe – The market will hold off and keenly monitor the British CPI inflation report. to determine the possibility that the Bank of England (BOE) would keep raising interest rates by 50 basis points as it did at the previous meeting. If CPI and Core CPI inflation both increase in June The BOE might be able to proceed with a +50bps rate hike at its August meeting, though, if the rate somewhat decreased to 8.2% and 7.1%, respectively. BOE) and the European Central Bank (ECB) to evaluate the two central banks’ monetary policy trajectories.
Asia – The market anticipates that China’s economic recovery would be mediocre at best. reflected in the second quarter’s economic growth rate, which will decelerate to +0.9% from the first quarter. This is consistent with the main economic indicators for June, which predict that industrial production will increase by only 2.5%y/y and retail sales will increase by about 3.3%y/y, both slower growth rates than in May. May not significantly impact the financial markets in China. Because market participants anticipate that the Chinese government may introduce additional stimulus measures. Later this month, following the Politburo meeting. The stock market will observe. According to many analysts’ June CPI Inflation Report, CPI inflation may be 3.3%.Notwithstanding core inflation Core-Core CPI, which excludes prices for fresh food and energy, may slow down to 4.2%, which may not be high enough or the inflation trend may not be accelerating clearly enough. That will influence the Bank of Japan’s (BOJ) decision to tighten or not at its meeting in July.
Thai side – We predict that the Prime Minister election will take a while. Following the expansive party and allies Prepare to announce Khun Pita, who we believe should be a candidate in the second round. It is important to keep track of whether the Senate side will provide at least 50 votes in the second round of voting. The Pheu Thai Party will choose a candidate and serve as the leader to establish a government in the third round of voting rather than the Kao Klai Party. Even though the Prime Ministerial election may take longer than expected, it may end up being a Pheu Thai Party candidate who receives the most votes. Moreover, the Pheu Thai Party might take the initiative in putting together a government. In these circumstances, it might be better for the financial market than if the Progressive Party takes the lead in creating a government. This is evident from the most recent data, which shows that on Friday, net foreign purchases of Thai stocks reached roughly +1.7 billion baht. However, the unpredictability of the political climate in Thailand It can make market participants afraid to take too much risk. The financial market is still very volatile as a result.
Pertaining to the baht’s trend Vote for Prime Minister, we project It will continue to influence how the baht changes. Particularly, overseas investors might be willing to take a chance on Thai assets. In the event that the Pheu Thai Party is given the chance to propose a candidate for prime minister following the results of the second round of voting. As of the third round of voting, the baht’s resistance has fallen to a range of 35.00 baht to the dollar, while the crucial support range will be between 34.30 and 34.40 baht to the dollar.
Regarding the dollar, we think it could strengthen once more. Should the market assume risks (Risk-Off) if listed businesses post poor results? Watch out for the British CPI inflation report as well, as it could have an impact on how the British pound and the dollar move. The pound could decline. If inflation declines more than anticipated causing the market to downgrade the likelihood of the Bank of England raising interest rates by 50 basis points
However, we continue to advise business owners to use a variety of hedging tools, such as options, to increase efficiency during the period of high volatility in the financial market caused by both Thai political factors and financial market conditions during the earnings report of listed companies in the second quarter. In order to protect against currency risk This week, focus on the baht frame at a rate of 34.40–35.00 baht/dollar. expected to be between 34.50 and 34.75 baht to the dollar.
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SOURCE: http://siamrath.co.th
