Thai Baht Edges Up Against Dollar Amid Inflation Watch and External Factors

The Thai baht strengthened to 32.91 per US dollar last week, supported by a stronger Japanese yen and reduced expectations of a Federal Reserve rate hike this month, Kasikorn Research Center said. Kasikornbank expects the baht to trade between 32.50 and 33.20 per dollar during September 7–11. Key factors to watch include Thailand’s August inflation figures, foreign fund flows and developments in the Middle East. The baht initially weakened to a nearly one-month low of 33.38 per dollar early last week, pressured by falling gold prices, a stronger US dollar and Middle East tensions that pushed up oil prices and increased demand for the dollar as a safe haven. The currency later recovered alongside other Asian currencies and rising gold prices. On September 4, the baht closed at 32.91 per dollar, compared with 32.94 the previous week. Foreign investors were net buyers of Thai equities worth 3.148 billion baht but recorded net outflows of 5.881 billion baht from the Thai bond market. The Thai stock market was volatile throughout the week, initially gaining on buying in banking and technology stocks before falling sharply amid concerns over US interest rates and Middle East tensions. Selling hit several sectors, particularly finance, electronics and transport, before the market recovered toward the end of the week after Federal Reserve officials signalled support for keeping interest rates unchanged. The SET Index closed September 4 at 1,595.58 points, up 0.46% from the previous week. Average daily trading value rose 5.11% to 68.124 billion baht, while the mai index fell 1.34% to 225.98 points. Kasikorn Securities expects the SET Index to find support at 1,570 and 1,550 points, with resistance at 1,605 and 1,630 points. Markets will also monitor US August consumer and producer price data, existing-home sales and weekly jobless claims. Overseas factors include the European Central Bank meeting, second-quarter GDP figures for the eurozone and Japan, and August consumer and producer prices from China.