Post by mangomoney on Jan 24, 2017 14:39:32 GMT 7
Baht forecast to hit 36.5 by mid-year
The baht is expected to weaken to 36.5 against the greenback in the first half of this year before reversing the trend to become firmer at 35.5 at the end of the year as US President Donald Trump might not be able to deliver as strong economic growth as expected, says TMB Bank (TMB).
"As the market's expectations for Mr Trump's policies are rather high, coupled with the fact that the Fed (Federal Reserve) has signalled multiple increases in the policy rate this year, we expect the US dollar to keep appreciating in the first half of this year," said Saranya Phuphatana, executive vice-president and head of capital markets at TMB.
Since the US presidential election in November last year, the market has priced in the new president's election promises to spur growth. This has triggered capital repatriation to the world's largest economy and pushed up the greenback, he said.
"But the possibility of implementing these policies remains in doubt and if it turns out that he can't deliver all that he has promised, the US dollar could depreciate in the second half of this year," said Mr Saranya.
TMB forecasts the US central bank this year will raise its target rate twice, by 25 basis points each time, while the Bank of Thailand's Monetary Policy Committee (MPC) will keep its policy rate on hold at 1.5% throughout the year to accommodate the economic recovery.
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The baht is expected to weaken to 36.5 against the greenback in the first half of this year before reversing the trend to become firmer at 35.5 at the end of the year as US President Donald Trump might not be able to deliver as strong economic growth as expected, says TMB Bank (TMB).
"As the market's expectations for Mr Trump's policies are rather high, coupled with the fact that the Fed (Federal Reserve) has signalled multiple increases in the policy rate this year, we expect the US dollar to keep appreciating in the first half of this year," said Saranya Phuphatana, executive vice-president and head of capital markets at TMB.
Since the US presidential election in November last year, the market has priced in the new president's election promises to spur growth. This has triggered capital repatriation to the world's largest economy and pushed up the greenback, he said.
"But the possibility of implementing these policies remains in doubt and if it turns out that he can't deliver all that he has promised, the US dollar could depreciate in the second half of this year," said Mr Saranya.
TMB forecasts the US central bank this year will raise its target rate twice, by 25 basis points each time, while the Bank of Thailand's Monetary Policy Committee (MPC) will keep its policy rate on hold at 1.5% throughout the year to accommodate the economic recovery.
more...
Please credit and share this article with others using this link:
www.bangkokpost.com/business/news/1185673/baht-forecast-to-hit-36-5-by-mid-year
View our policies at goo.gl/9HgTd and goo.gl/ou6Ip. © Post Publishing PCL. All rights reserved.
