CIMB: Baht will likely trade at 32.00-32.40/$ next week

CIMB Thai Bank projects that the Thai baht will trade in the range of 32.00-32.40 to the dollar next week (Jan. 8-12), INN News reported today (Jan. 7).

All eyes are now on the Bank the Thailand as to whether it will introduce measures to rein back the Thai currency’s continuous and rapid rise, analysts at this bank said.

The Thai baht strengthened against the greenback last week even though the latest US economic figures are mostly good with this supporting expectations that the Federal Reserve will raise interest rates this year.

However some experts doubt that the Fed will hike rates  because US inflation remains lower than its  2% target.

Meanwhile a Reuters report published by CNBC said that the dollar rose on Friday, after a brief dip, as investors reckoned a weaker-than-expected US December non-farm payrolls report would not deter the Federal Reserve from raising interest rates multiple times this year though at a gradual pace.

US non-farm payrolls increased by 148,000 jobs last month. Economists were forecasting job gains of 190,000. Employment data for October and November data were revised to show 9,000 fewer jobs created than previously reported.

The dollar briefly slipped after the softer-than-forecast number, but has since regained momentum.

“It was a little disappointing. The market doesn’t care. The margin of error on this number is always big,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, referring to the US jobs data.

“What we’d be concerned about is if we see a couple of prints below 100,000. Until then we’re okay,” he added.

Fed funds futures still price in a nearly 70 percent chance the US.central bank will hike interest rates in March, according to CME’s Fedwatch.

One bright spot in the US December employment report was the rise in wage growth, analysts said. Average hourly earnings rose 9 cents, or 0.3 percent, in December after gaining 0.1 percent in the prior month. That lifted the annual increase in wages to 2.5 percent from 2.4 percent in November.

“This provides further evidence that wage gains have become self-sustaining while helping to support interest rate expectations on the front end of the curve,” said Karl Schamotta, director of global product and market strategy, at Cambridge Global Payments in Toronto.


Top: A pile of Thai baht notes. Photo: INN News