Better US data affecting Thai baht, stocks

INVESTORS expect the US Federal Reserve to raise its key interest rate faster after the US job market improved with this affecting the Thai baht and stocks, Thai News Agency said today (Feb. 3).

Kasikorn Research Center said this past week the Thai baht stayed steady in a limited range because the US dollar was shored up with buying pressure amid expectations the Federal Reserve might raise its benchmark interest rate at its next meeting in March, after stating at its previous meeting that US inflation is likely to stabilize around its 2% target.

According to a CNN Money report the US economy added 200,000 jobs in January, and wages grew at the fastest pace in eight years.

The unemployment rate stayed at 4.1%, the lowest since 2000, the Labor Department said yesterday.

Wages were up 2.9% compared with a year earlier, the best pace since June 2009. Wage growth has been the last major measure to make meaningful progress since the end of the Great Recession.

The Federal Reserve would like wages to grow even faster — 3% or more — but Friday’s report was a welcome sign for workers after years of stagnant pay.

Kasikorn  Research Center added that the net sale of Thai bonds by foreign investors reduced the pressure pushing up the Thai baht yesterday, leading to the Thai currency trading at 31.37 to the dollar compared to 31.36 previous Friday Jan. 26.

Regarding the SET Index, this is influenced by overseas factors and closed yesterday at 1,827.35 points, down 0.08% from the previous week, with average daily turnover dropping 14.97% from the previous week to around  59,738.05 million baht.

The MAI market closed at 532.76 points, dropping 0.24% from the previous week.


Top: Some Thai baht notes. Photo: Peter Hellberg (CC-BY-SA-2.0)