Baht continues to strengthen as gold price rises
The baht opened this morning (December 28) at 34.28 baht per US dollar, slightly stronger than the previous day’s closing rate at 34.38 baht, and attaining its highest level in five months.
Krung Thai Bank’s foreign currency analyst, Poon Panitpiboon said on Thursday that the strengthening baht is at the higher end of the bank’s estimation of within 34.26-34.45 baht per US dollar.
He added that factors contributing to this rise included the weakening of the US dollar and the decrease in yield value of United States’ 10-year bonds (from 3.89% to 3.8%), which in turn raises the gold price.
Investors in the US market remain confident that the Federal Reserve will gradually decrease interest rates from next year onwards, and continue their risk-on strategy, as can be seen from the S&P500 index closing on Wednesday at +.014%.
In Europe, investors had a similar sentiment and drove the STOXX600 index to close at +0.21%. Investors’ decisions are also backed by the trend of central banks adjusting their interest rates downwards.
Poon urged investors in Thailand to monitor the baht’s fluctuation on Thursday afternoon, citing the estimated decrease in transactions as the New Year holidays draw close.
He also predicted that the baht will eventually stabilise at not far from the bank’s year-end estimation of 34.5 baht per US dollar but said it was unlikely that the baht would firm up past 34 baht per US dollar before the markets take note of such new factors as the employment rate in the US in the first week of January.
