Baht expected to stay strong next week
KASIKORN Thai Research Company projects that the Thai baht will move in the range of 32.50-32.80 baht to the US dollar next week (Dec. 4-8) after a steep climb to a 31-month high this past week, Thai News Agency reported today (Dec. 2).
The Thai currency rose to almost 32.50 baht to the dollar from the beginning to mid-week after the greenback came under pressure over uncertainty of US tax reform plan but edged down the rest of the week, Kasikorn Thai said.
Meanwhile Reuters reported that the US Senate approved a sweeping tax overhaul today (Dec. 2), moving Republicans and President Donald Trump a major step closer to their goal of slashing taxes for businesses and the rich while offering everyday Americans a mixed bag of changes.
The US dollar also got supported by the American Gross Domestic Product (GDP) growing faster than expected by 3.3% in the third quarter; and there was also buying pressure prior to the Senate’s consideration of the tax reform.
The Thai baht traded at 32.60 to the dollar yesterday compared to 32.68 previous Friday Nov. 24.
According to another Reuters report published by CNBC, the US dollar index dropped sharply, hitting session lows on Friday (Dec. 1), on reports Michael Flynn may implicate President Donald Trump in the Russian investigation.
ABC News reported that retired Lieutenant General Michael Flynn would testify that he was directed by the Trump administration to make contact with the Russia.
Earlier Friday, Flynn pleaded guilty to knowingly making materially false, fictitious and fraudulent statements to FBI agents, in a plea hearing in Washington, D.C. federal court.
On the news Trump may be implicated, the dollar index dropped 0.18 percent to 92.88, turning negative on the day, after poising to eke out some tiny gains for the week just hours earlier.
The euro climbed as much as 0.3 percent earlier in the session to hit $1.1940 but it gave up most of its gains, trading 0.08 percent lower at $1.1893 on Friday.
“The weakness in equities is causing a mild risk-off sentiment, though the overall mood seems to be quite constructive towards the euro,” said Manuel Oliveri, an FX strategist at Credit Agricole in London.
Global manufacturing expanded at the fastest pace for years last month and the second fastest for two decades in the euro zone, driven by robust demand. This has bolstered the case for central banks to shift to tighter monetary policy.
Top: A bank employee gathers Thai baht notes at a Kasikornbank. Photo: Reuters published by Themalaymailonline.com