Baht strengthens amid global trade recovery, mass bond purchases
The baht opened at Bt31.25 to the US dollar this morning (August 27), strengthening from yesterday’s close of Bt31.36.
The Thai currency is expected to move between Bt31.10 and Bt31.30, said Jitipol Puksamatanan, head of Markets Strategy at SCB Securities.
The US capital market hit another new high on Wednesday night (Thailand time). The S&P 500 Index rose by 1.0 per cent, while Europe’s Stoxx Euro 600 was up 0.9 per cent over positive news of a Covid-19 vaccine and US monetary policy, which is likely to be eased for the long term, Jitipol said.
Meanwhile, the bond market did not gain much positive sentiment from a relaxed US monetary policy. The US Ten-Year bond was unchanged at 0.68 per cent, causing the dollar to weaken slightly, by 0.1 per cent, as the Australian and New Zealand dollars strengthened by 0.6 and 1.0 per cent on belief that inflation could be higher than what central banks expected.
The baht continued to gain more liquidity in response to a global trade recovery and foreign investors’ mass buy-ups in the bond market. If the US and China reach an agreement on the first phase of trading, the baht and other Asian currencies will strengthen further, Jitipol added.
