Thai baht, stocks may dive again next week

KASIKORN Research Center expects both Thai baht and stocks to touch new lows next week after the Thai currency weakened the most in 8 months this week while the SET index hit its lowest point in 10 months, Thai News Agency reported today (June 30, 2018).

The Thai currency plunged to 33.22 baht to the dollar this week, its lowest level in 8 months, with its slide being in tandem with Chinese yuan and other regional currencies. Yesterday, Friday June 29, 2018, the Thai currency closed at 33.12 baht to the dollar, compared to 32.92 baht level the previous Friday.

Kasikorn Research Center projects that next week, July 2-6, 2018, the Thai baht will move in a range of 32.80-33.40 baht to the dollar.

Investors are also reducing their exposure to risky assets amid worries about drawn-out disputes between US and its major trading partners.

The Thai baht was also pressured during the week by foreigners selling Thai stocks and bonds.

On Friday June 29, 2018 the  SET Index plunged to 1,595.58 points, a drop of 2.41% from the previous week, its lowest point in 10 months. Daily trading volume shrank by 13.55% from the previous week to 53,313.34 million baht.

The Market for Alternative Investment (MAI) closed at 416.57 points, a drop of 5.28% from the previous week.

The SET Index dipped almost the whole week even though there were supporting factors for the energy sector through the rise in global oil price; however but this was not enough to compensate for foreign selling pressure early and mid-week amid worried about global trade, particularly trade retaliations between US and China.

Although foreign investors returned to buy Thai stocks at the end of the week, this was not enough to pull the SET Index out of the negative territory.

Kasikorn Research Center sees SET Index resistance at 1,575 and 1,550 points next week while support would be at 1,610 and 1,625 points, with the most important factor to watch being the trade retaliations.


Top A bank employee gathers Thai baht notes at a Kasikornbank. Photo: Reuters published by