Bangkok: Thailand has been added to the United States' list of countries under currency watch, a move anticipated to have minimal effect on the Thai baht, according to Kasikorn Research Center. Despite this, the center foresees significant volatility in both the baht and Thai stocks next week. Market participants will be closely monitoring Thai inflation, foreign fund flows, and the trajectory of the US dollar following the Federal Reserve's decision not to indicate a swift reduction in interest rates, as well as the upcoming February 8th general election. The baht is expected to fluctuate between 31.00 and 31.80 baht per dollar, while Thai stocks may experience mixed trading with a critical support level at 1,300 points.
According to Thai News Agency, the Thai baht strengthened last week, aligning with most Asian currencies and global gold prices, which hit all-time highs. The US dollar's lack of support ahead of the Federal Reserve meeting, coupled with President Donald Trump's indifference to the weakening dollar, contributed to this trend. The baht reached 30.866, its strongest level in nearly five years. However, it began to weaken mid-week, possibly due to market intervention aimed at reducing volatility, and continued to decline towards the week's end as global gold prices fell due to profit-taking.
Additionally, the sentiment towards the US dollar improved after the Federal Reserve meeting, which maintained the policy interest rate at 3.50-3.75% and provided a positive outlook on the US economy. This led market participants to believe that a rate cut was not imminent. Comments from the US Treasury Secretary and speculation regarding the next Federal Reserve chairman also bolstered the dollar.
The US Treasury Department's report on macroeconomic policy and exchange rates, released on January 29, 2026, included Thailand on the monitoring list, alongside countries like Japan and China. Despite this addition, the Thai baht's movement remained largely unaffected by the week's end, closing at 31.37 baht per dollar.
For the upcoming week, Kasikorn Bank projects the Thai baht to trade within a 31.00-31.80 baht per dollar range. Key factors to monitor include Thailand's January inflation rate, foreign fund flows, and the results of the Thai general election. US economic data such as manufacturing indices, non-farm payrolls, and the unemployment rate will also be pivotal. Internationally, markets are awaiting the outcomes of the Bank of England and European Central Bank meetings, as well as PMI indices from major economies.
In the Thai stock market, the SET Index experienced a slight decline initially last week, mirroring international market trends amid geopolitical concerns and potential US government shutdown risks. However, the index rebounded later, reaching a three-month high, driven by foreign investor interest in technology, energy, and bank stocks.
The index declined again towards the week's end, influenced by the Federal Reserve's unchanged interest rate decision and Thailand's addition to the US currency watch list. The SET index closed at 1,325.62 points, marking a 0.85% increase from the previous week, though average daily trading volume decreased by 14.33%.
Looking ahead to the week of February 2-6, 2026, Kasikorn Securities Co., Ltd. forecasts the Thai stock index to have support levels at 1,300 and 1,285 points, with resistance at 1,345 and 1,355 points. Key elements to watch include Thailand's January inflation figures, Q4 2025 earnings reports, and foreign capital flows. US economic data and international economic indicators, such as ECB and BOE meetings, will also be crucial.