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KBank warns of baht volatility after sell-offs

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KBank warns of baht volatility after sell-offs | Samui Times
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The baht faced sell-offs early in the week in line with falling safe-haven currencies and assets, triggered by stronger-than-expected Chinese PMI (purchase managers index) data.

KBank warns of baht volatility after sell-offs | News by Samui Times

The baht fell further later in the week to a one-month low of Bt30.38 to the US dollar, after the Bank of Thailand (BOT) signalled to closely monitor the baht’s movement and warned that the Thai currency would likely be volatile and might not have one-sided gains as seen in the past months. 

In addition, the baht’s losses were also in line with net foreign selling orders of Thai stocks. 

During the week December 9-13, Kasikorn Research Centre (KBank) expects the baht to move within a range of Bt30.20-30.50 to the dollar. 

Key factors to be monitored closely are the US Federal Open Market Committee (FOMC) meeting outcome, the Fed’s new economic projection and dot-plots at the upcoming meeting on December 10-11, as well as the US-China trade deal. 

US economic data to be released during the week include November retail sales, consumer price index (CPI), producers price index (PPI) and Export-Import Price Indices.

Market participants will likely await the UK election and the European Central Bank (ECB) meeting on December 12, and November Chinese economic data. 

The SET Index closed at 1,558.99 points (the lowest in 11 months), down 1.99 per cent over-week. 

The average daily trading value was Bt46,251.64 million, down 17.87 per cent over-week. The MAI closed at 313.89 points, down 1.56 per cent over-week.

The SET index dropped throughout the week amid concerns of a domestic economic slowdown. 

In addition, bank shares were under pressure as the BOT plans to issue practice guidelines to ensure that financial institutions charge consumers justifiable fees. 

Moreover, tensions between the US and its trading partners, unresolved dispute with China, and worries over the impact of raising the minimum wage also weighed on the SET. 

However, foreign investors remained in net selling positions. 

The SET is also expected to have support at 1,550 and 1,525 points during December 9-13 but resistance at 1,575 and 1,585 points, respectively. 

Key matters to watch include an upcoming FOMC meeting on December 10-11, the US-China trade talks and the UK election result. Key US indicators include November CPI, PPI and retail sales. 

Other international factors that warrant close monitoring include an upcoming ECB meeting, China’s November CPI and PPI, plus Japan’s gross domestic product report for the third quarter of 2019, November PPI and October industrial production.

 The Nation

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