Baht could strengthen further depending on US Fed move

The Thai currency is likely to move between 29.95 and 30.10, said Krungthai market strategist Poon Panichpibool.

Poon said financial markets are still in a risk-on state even after negative factors – the US political situation and the reduction of quantitative easing (QE) in the country – are starting to be resolved. The Nasdaq index rose by 0.4 per cent, while the Stoxx 50 rebounded by 0.1 per cent.

The market believes the US Federal Reserve will not reduce its QE, while a QE taper will not occur as in 2013, he said.

Also, some investors are actually concerned about stocks that keep rising and want to hold on to US government bonds.

The US Ten-Year Treasury yield decreased by around 4 basis points to 1.10 per cent.

Meanwhile, the dollar strengthened, with the index increasing by 0.3 per cent to 90.35 points.

Poon said markets are still monitoring Democrat attempts to remove Donald Trump from office.

The market strategist estimated that the dollar would weaken if the Fed signals that it will not relax its QE. Under this assumption, other currencies, including the baht, would strengthen against the dollar, he added.