Amid bleak US economic scenario, continuous purchases boost baht

The Thai currency is expected to move between 31.25 and 31.45, said Jitipol Puksamatanan, head of Markets Strategy at SCB Securities.
On Thursday night, the financial market was in risk-off mode. The S&P 500 decreased by 0.4 per cent, after US second-quarter gross domestic product (GDP) contracted by 32.9 per cent year on year. It was the lowest in history.
The Stoxx Europe 600 fell by 2.2 per cent, while Germany's GDP showed contraction by 10.1 per cent.
Investors are concerned that several EU governments will suspend discussions with the US before the election period, pressuring the WTI crude oil price to drop by 2.1 per cent to $40 per barrel. Besides, gold price fell by 0.7 per cent to $1,956 per ounce.
The latest trend in the financial and bond market was the weakening dollar amid the fluctuation in US politics. This situation pressured the USD Index to drop by 0.4 per cent, the lowest level since May 2018.
The US Ten-Year Treasury yield increased by 3 basis points to 0.54 per cent, pulling the Thai Ten-Year Treasury yield to 1.20 per cent.
Also, the baht was purchased continually in line with other recovering currencies around the world. The yen weakened from 105 to the dollar, pointing to the market focused on the Asian safe haven currency.
In the short term, the strategist advised investors to monitor the direction of the baht and yen.