Bangkok, June 15 – The baht depreciated after Fed keeps interest rates steady and views 2 more rounds this year to curb inflation Analysts point to the US interest rate cycle as the destination. US economy soft landing, recommending China to stimulate the economy, good for Thai stocks
The Thai stock market at 11:09 a.m., the SET Index was at 1,560.69 points, down 0.46 points. After opening this morning, the SET Index was 1,559.35 points, down 1.80 points.
Mr. Kornphat Worachet, director of research and investment services, Krungsri Patanasin Securities, said that the decision of the US Federal Reserve (Fed) which came out to maintain the policy rate at 5-5.25% was the first time in 15-month cycle, but sends a Hawkish Skip signal, namely adjusting the Dot Plot (policy interest rate trend) in 2023 to 5.5-5.75%.
However, the US Bond Yield was stable and the Dollar Index weakened. Assessing that even though the rest of the interest rate outlook may see an increase together with the US economy in the next period can be sustained By maintaining the same view that is The US interest cycle is the destination. And the US economy is a soft landing picture.
At the same time, keep an eye on the Chinese economic stimulus plan. China has called on private economists six times over the past two weeks, with the Financial Times estimating that the market expects the Chinese government to boost the economy through investments worth around 1 trillion yuan ($140 billion) in infrastructure. Coins), citing a report from Bloomberg, it is believed that there is a possibility that China will announce further stimulus measures in the near term. Research is positive on stocks related to the Chinese economy such as IVL, PTTGC, SCGP, DOHOME, GLOBAL.
Fed Chairman Jerome Powell said the Fed decided to hold short-term interest rates in the range of 5.00-5.25% at its June 14 meeting and released his expectations for the policy rate. plot) signaling an increase of interest rates by 0.25% twice more to 5.50-5.75% by the end of the year. to pull inflation back to the Fed's target of 2%
“The decision by the Fed to hold off on interest rates requires more time to assess the impact of the Fed's start to the March 2022 rate hike cycle, as well as the impact of the bankruptcies of three banks in March 2022. United States, and how it will affect consumers and businesses. And a rate cut in the next two years would be appropriate as well. But it should be lowered when inflation shows signs of a significant slowdown,” Powell said.
Mr. Powell commented on the US economy. Economic growth and employment remained stronger than expected. Although pressured by the Fed's aggressive monetary policy last year Such conditions may cause the Fed to take longer to pull inflation down. But the Fed will do so gradually without hurting the economy.
Powell's comments are in line with the Dot Plot report, which expects the Fed to begin cutting interest rates in 2024, with a total 1.00% rate cut in the year. 2.5%
Ms. Kanchana Chokpaisarnsilp research executive Kasikorn Research Center said the baht adjusted to the level of 34.80-34.82 baht per dollar. This morning (10:00 am) compared to yesterday's close at 34.67 baht per dollar. The Thai baht and other Asian currencies weakened, while the dollar gradually gained support from Fed dot plots, reflecting expectations that the Fed has two more rate hikes in the remainder of the year. Despite the decision to keep the interest rate unchanged at 5.00-5.25% in the meeting that ended last night (June 13-14). (such as industrial production and retail sales in May) came out weak, which also put pressure on sentiment of Asian currencies as a whole.-Thai News Agency
Source: Thai News Agency