Saturday, August 15, 2020

Surge in gold exports to limit weakening of baht: analyst

Feb 25. 2020
Facebook Twitter

By The Nation

The baht traded slightly higher in Tuesday morning trade at Bt 31.65 to the US dollar after closing on Monday at Bt 31.69/dollar, Jitipol Puksamatanan, senior director at SCB Securities (SCBS), said.

He expected the baht to move in a range of Bt31.60 to Bt31.70 against the greenback on Tuesday.

The baht moved up again as export of gold increased, suggesting that Thailand will remain a gold exporter when demand for the precious metal in the market is high. The large volume of gold exported last month partly contributed to a return of Thai exports growth, rising to 3.35 per cent after six straight months of contraction.

As investors rushed to buy safe-haven assets over concerns of Covid-19 spreading outside China, investors are expected to continue to dump Thai stocks, he said. They, however, may buy Thai bonds, so their investment strategy would stabilise the baht value, preventing it from further sliding today.

US financial markets faced a sell-off on Monday night, as the S&P500 fell 3.35 per cent, while in Europe, the Euro Stoxx and Britain’s FTSE 100, plunged 4.01 per cent and 3.34 per cent respectively. It was their worst performance since August last year. In the global bond markets, the US 10-year yield dipped below 1.40 per cent for the first time since 2016 while the Japanese bond yield also went down to minus 0.09 per cent, the lowest level since November last year as investors worried about the impact of Covid-19 on the economy.

Investors see Japanese bonds and the yen as safe-haven assets. The Australian and New Zealand dollars went down due to decreasing prices of commodities products. This made the US dollar unchanged against other major currencies last night.

Tags:
Facebook Twitter
More in Business
Editor’s Picks
wmg-logo
Top News
wmg-logo