Thai baht surges to 27-month high
THE Thai will likely move in a range of 33.20-33.60 to the dollar next week after appreciating the most in 27 months, Thai News Agency quoted Kasikornbank as saying today (July 28).
Kasikornbank Research Center said this week (July 24-27) the Thai baht strengthened and tested the 33.30 baht to the dollar level which is its strongest since May 2015 or around two years and three months.
However the Thai currency’s appreciation is moving in tandem with other regional currencies and occurred amid pressure to sell the US dollar after the US Federal Reserve’s policy statement reflected an uncertainty on increasing interest rates while giving a signal that it is ready to do so again shortly.
Another factor pushing the Thai baht higher was foreign investors buying Thai bonds towards the end of the week with the Thai currency trading at 33.30 to the dollar on July 27 compared to 33.67 baht to the dollar on July 21.
Kasikornbank expects the Thai baht to move in a range of 33.20-33.60 to the dollar next week (July 31-August 4) with the market’s attention being on US politics, Fed statement, Chinese, Euro Zone and US PMI (Purchasing Managers’ Index), key US figures such as non-farm payroll, unemployment rate, housing sales total and Core PCE Price Index.
Meanwhile a Reuters report published by CNBC says the dollar dipped against its major peers today, its mild bounce earlier petering out ahead of the second quarter US economic growth data due later in the session.
The dollar index against a basket of six major currencies was a shade lower at 93.826 after edging up 0.2 percent the previous day.
The greenback, which had sunk to a 13-month low midweek after the Federal Reserve’s policy statement suggested it was in no hurry to raise interest rates again, received a lift on Thursday as Treasury yields rose on the back of upbeat US durable goods and trade data.
Market focus was now on second quarter US gross domestic product data due at 1230 GMT.
Economists expect the world’s largest economy to have grown around 2.6 percent in the second quarter, from 1.4 percent in the first quarter. A solid outcome will no doubt give the beleaguered dollar some respite from the recent sell-off.
Top: A bank employee gathers Thai baht notes at a Kasikornbank. Photo: Reuters published by Themalaymailonline.com