At the commencement of trading on Tuesday, the baht depreciated to 35.71 against the US dollar due to positive labor data from the United States. On Friday, the Thai currency had concluded at 35.32 per dollar.
Krungthai Bank’s forex analyst, Poon Panichpibool, elucidated that the better-than-anticipated employment rate in the US has led to expectations that the US Federal Reserve will not hastily decrease its policy interest rate.
In November, the US unemployment rate declined from 3.9% to 3.7%, accompanied by a notable increase of 199,000 in total nonfarm payroll employment.
The dollar’s appreciation can also be credited to the yen’s weakening, which happened after the concern diminished about Japan’s central bank implementing stricter fiscal policies during its meeting this month.
The rise in US 10-year bond yields, reaching a peak of 5% on October 23, has also contributed to the depreciation of the baht, according to Poon. He further stated that the baht may experience further decline following the release of new key economic figures by the Fed, Bank of England, and European Central Bank (ECB) this week.
Poon anticipates that the Fed will maintain its policy rate at 5.25-5.50% due to the deceleration of US inflation, while the ECB will keep its policy rate at 4% and deposit facility rate at 5.25%.
With caution, Poon warned that the baht may soon test its resistance level of 36 per US dollar.