Thai Baht Hits 14-Month Low Before Rebound as Stocks Recover on Investor Confidence

PATTAYA, Thailand – The Thai baht experienced sharp volatility last week, weakening to its lowest level in 14 months before recovering at the end of the week, while the Thai stock market turned positive following renewed investor confidence after the Constitutional Court ruled that the government’s 400-billion-baht borrowing decree does not violate the Constitution. Kasikorn Research Center reported that during July 6–10, the baht weakened in line with movements of Asian currencies and global gold prices as the US dollar strengthened. Market concerns over renewed tensions in the Middle East, after US President Donald Trump said a ceasefire agreement between the United States and Iran had ended, added pressure on regional currencies. Expectations that the US Federal Reserve could maintain a tighter monetary policy also supported the dollar. Minutes from the Fed’s June 16–17 meeting reflected concerns over inflation risks, pushing the baht to a 14-month low of 33.54 baht per US dollar. The currency later recovered toward the end of the week as investors sold dollars following reduced concerns over Middle East tensions and signs that Iran was seeking negotiations to end the conflict. A stronger Japanese yen also helped support Asian currencies. On July 10, the baht closed at 33.30 baht per dollar, compared with 33.14 baht the previous week. Foreign investors continued buying Thai shares, recording net purchases of 15.73 billion baht, although the bond market saw net foreign outflows of 22.73 billion baht. For July 13–17, Kasikorn Bank expects the baht to move within a range of 33.00–33.70 baht per dollar. Key factors to watch include foreign fund flows, Middle East developments, and Federal Reserve Chair Jerome Powell’s testimony to Congress. Investors will also monitor major US economic data, including consumer prices, producer prices, retail sales, housing data, industrial production, regional manufacturing surveys, consumer confidence, the Fed’s Beige Book report, and weekly jobless claims. International markets will also focus on China’s second-quarter GDP and June economic figures, including exports, industrial production and retail sales, as well as eurozone inflation data. Meanwhile, Thailand’s stock market recovered after a volatile week. The SET Index rose slightly at the beginning of the week before falling below 1,600 points due to selling pressure on technology and electronics stocks, concerns over a major energy company shareholder selling shares, and renewed Middle East tensions. The market rebounded late in the week after investors returned across sectors following the Constitutional Court ruling that the government’s 400-billion-baht borrowing decree was constitutional. Reduced concerns over Middle East tensions also supported sentiment after signs of possible negotiations between the United States and Iran. The SET Index closed on July 10 at 1,621.55 points, up 0.64% from the previous week. Average daily trading value increased 0.53% to 80.61 billion baht. The mai Index closed at 226.17 points, rising 2.29%. For July 13–17, Kasikorn Securities expects the SET Index to have support levels at 1,600 and 1,575 points, with resistance at 1,625 and 1,645 points. Market factors to watch include Federal Reserve policy signals, second-quarter earnings from Thai listed companies, particularly banks, Middle East developments, and foreign capital movements. Global economic indicators, including US inflation data, retail sales, housing starts, industrial production, China’s GDP and June economic figures, and eurozone inflation, will also influence market direction. (TNA)