Bangkok: The Thai baht and gold prices are experiencing ongoing fluctuations, prompting analysts to advise close monitoring of the situation.
According to Thai News Agency, the recent decision by the United States to place Thailand on its Monitoring List is not a direct accusation of currency manipulation but rather a mechanism to track currency policy. This move has heightened market caution concerning the direction of the Thai baht.
Dr. Piyasak Manasansut, Chief Economic Researcher for Innovation at InnovestX Securities Co., Ltd., explained that the Monitoring List serves as a policy tool to observe trading partners, considering factors such as exchange rates and macroeconomic balance. This includes international reserves, current account surpluses, and trade balance with the US, aiming to assess currency intervention efforts. Dr. Manasansut clarified that inclusion on this list signals markets and central banks to remain vigilant, rather than indicating manipulation.
Currently, the Thai baht has been appreciating, diverging from expectations of weakening, with the Bank of Thailand focusing on maintaining currency stability. Nevertheless, Thailand's placement on the Monitoring List adds pressure on policymakers to exercise increased caution. Analysts predict that the baht could appreciate in the short term, reaching close to 31.8 baht per US dollar, before potentially weakening later in the year if monetary policy becomes more accommodative.
Furthermore, the global financial markets are closely watching US monetary policy developments, especially with reports of President Donald Trump's potential nomination of Kevin Warsh as the new chairman of the Federal Reserve. Analysts believe that this leadership change could introduce uncertainty about interest rate directions, contributing to volatility in global financial markets.
Sintthanan Boonyod of Bualuang Securities Public Company Limited highlighted the importance of monitoring the US government's stance and the Federal Reserve's role, as these will influence capital flows in the stock market, currencies, and gold. The transition in FED leadership is anticipated to heighten market volatility, emphasizing the need for investors to focus on portfolio risk management.
In the gold market, Mr. Nattapong Hiranyasiri, CEO of MTS Gold Group, noted that gold prices are expected to remain highly volatile due to global news factors and speculative trading. Despite short-term volatility, fundamental factors such as geopolitical tensions and global economic uncertainty support a favorable medium- to long-term outlook for gold. Investors are advised to consider appropriate investment timing and risk levels.
Analysts collectively emphasize the importance of monitoring international factors, monetary policies, and the stances of major economies during times of high volatility in the Thai baht and gold prices. Adjusting investment strategies to align with rapidly changing market conditions is crucial for investors.