Saturday, July 04, 2020

Short-term selling weakens baht

Jun 04. 2020
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The baht fell to 31.58 to the US dollar on Thursday morning (June 4), weakening from the previous close of 31.50.

The Thai currency is expected to move between 31.50 and 31.70, said Jitipol Puksamatanan, the head of Markets Strategy, at SCB Securities.

The strategist said that the baht had previously strengthened to 31.50 to the US dollar, and has seen short-term selling. Moreover, the Thai currency was purchased for speculation. “Investors would not see the baht’s movement in line with other Asian currencies,” he added.

In the long term, he advised investors to monitor the direction of foreign investment in Thailand once the Thai economy recovers, as well as the weakening of the dollar. These will be the main factors determining if the baht would strengthen to its level before the Covid-19 outbreak, he explained.

On Wednesday night, the S&P 500 rose by 1.4 per cent, while Nasdaq closed at 9,682 points. Also, Euro Stoxx 50 rose by 3.5 per cent, pointing to a recovery in all industries.

The Ten-Year Treasury of the US and Germany moved to 0.75 per cent and -0.35 per cent, respectively.

Meanwhile, gold fell by 1.7 per cent to $1,700 per ounce.

ADP National Employment Report informed recently that another 2.8 million people in the US were unemployed, less than the estimated 9 million.

In the financial markets, the euro has recovered to 1.12 to the US dollar, while the yen weakened to 108 to the US dollar. This situation would push the European Central Bank committee to agree to injecting a stimulus budget for the economy.

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