Baht gains against dollar but stock market may hold key to trends

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The baht on Wednesday (April 15) opened at Bt32.62 to the US dollar, strengthening from Tuesday’s close of Bt32.72.
The baht would move between Bt32.55 to Bt32.75 per US dollar, said Jitipol Puksamatanan, head of Markets Strategy, at SCB Securities.He said the baht has gradually strengthened in line with the dollar. In the past five months, the weakest point of the Thai currency was Bt33.20 to the US dollar, he added. It is worth monitoring if the recovery of the stock market would bring investors back, or help strengthen the baht.

On Tuesday, the S&P 500 and Euro Stoxx 50 rose by 3.0 per cent and 0.86 per cent, respectively. Meanwhile, the VIX Index fell under 40 per cent, the first time in 30 days.

The International Monetary Fund (IMF) forecast that the global economy would contract by 3 per cent, worse than in 2008, since both advanced economies and emerging markets have been affected by the Covid-19 preventive measures.

In stock markets, the US Ten-Year Treasury bond contracted to 0.74 per cent, while German bond yields were at minus 0.38 per cent. Besides, WTI crude oil price has not increased from $20.80 per barrel.

The dollar index weakened to 98 points, the lowest in 30 days, since the market estimated that Europe countries would recover to operate businesses faster than the US.