Friday, August 14, 2020

Foreign investors' approach to Thailand may guide baht trends

Apr 03. 2020
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The baht on Friday (April 3) opened at Bt33 to the US dollar, unchanged from Thursday’s close, and would move between Bt32.85 and Bt33.15 per US dollar.

On Thursday night, the market showed interest in US President Donald Trump signalling collaboration between Saudi Arabia and Russia in reducing oil production by 10 million barrels per day. There were rumours that oil producers in Texas had talked to Russia on this matter as well.

This matter, in addition, pushed WTI and Brent crude oil price up by 20 per cent. The current price is $24 and $29 per barrel respectively, causing the S&P 500 to rise by 2.3 per cent on the back of energy stocks.

However, the dollar’s direction has fluctuated, since it did not weaken, compared to those risk assets, as in a normal situation, the strategist said.

“We believe that the oil price, which was heightened in the short-term, would not solve the producers’ scarce liquidity at this time when oil worldwide is being consumed at a low rate,” he added. “Investors must be careful about the strengthening dollar."

The baht on Friday morning strengthened from the investors’ positive view of emerging markets. However, the oil price was not the main factor in guiding the baht's direction, and investors should monitor investments of foreign investors in Thailand.

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