THE Thai baht strengthened and moved above 35 baht to the dollar last week in tandem with other Asian currencies after the greenback came under pressure because the market does not believe the US Federal Reserve will hike interest rates next month even though it has stated that it will be doing so this year, Thai News Agency quoted Kasikornbank as saying today (Feb. 25).
The Thai currency was also pressured by US Treasury Secretary Steven Mnuchin saying that US President Donald Trump’s policies and measures will have limited impact on this year’s economic outlook. On Friday Feb. 24, the baht closed at 34.91 to the dollar compared to 34.99 to the dollar last Friday Feb. 17.
Regarding next week’s outlook (Feb. 27 to March 3), Kasikornbank estimates that the baht will move in the range of 34.90-35.10 to the dollar as the market is awaiting Trump’s address to a joint session of the Congress on Feb. 28 while also watching for a signal from the Fed on the direction of the interest rates as well as following the release of important US economic figures such as Purchasing Managers’ Index (PMI), Consumer Confidence Index for February and the second report of the fourth quarter 2016 GDP.
The market is also awaiting Thai export figures for January and PMI of China and Europe.
The Thai stock market index moved lower last week as investors slowed down investing to assess Trump’s economic measures to spur the American economy with the SET Index closing at at 1,564.59 points, down 0.84% from the previous week, with average daily trade dropping by 19.17% from the previous week to 43,473.52 million baht.
Meanwhile MAI closed at 621.39 points, down 2.05% from the previous week.
Regarding next week (Feb, 27-March 3) Kasikorn Thai Securities Company sees the SET index getting support at 1,550 and 1,530 points with resistance being at 1,570 and 1,585 points respectively. Important issues to follow are still Trump’s address to the joint session of Congress and statements from senior Fed officials and other important US economic figures being release soon.
Factors of other countries that are interesting include the release of Japan’s Manufacturing Production Index (MPI) and Europe’s PMI.
Top: A currency exchange sign. Photo: Bradley Gordon (CC-BY-2.0)