Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Weekly THB Movement (May 20 - 24, 2002) The baht started the week with a firm tone at 42.60/64 THB/USD, barely strengthened from last week closing price of 42.66/68 THB/USD, before surging to the 15-month high of 42.53 THB/USD on Monday alongside regional currencies especially the Japanese yen and the Singapore dollar. The yen touched the 5-month high of 125.35 JPY/USD and the Singapore dollar tested the 7-month high of 1.7930 SGD/USD while the Philippine peso hit the 13-month high of 49.28 PHP/USD. The Singapore dollar was still supported by recent economic data showing a recovery while the Monetary Authority of Singapore said last Friday that the SGD strength was within its policy parameters. Meanwhile, most players thought that the Japanese economy was embarking on an upturn; therefore, capital flowed into the equity market. The Nikkei index closed at 11,856.54 point after rising for five consecutive days. The downfall of USD ended suddenly on Tuesday when markets hesitated to dampen the USD anymore and the monetary authorities in the region were showing signs that they were uncomfortable about their strengthened currencies. As a consequence, the baht set back to the level of 42.70 THB/USD ahead of the censure debate scheduling from Wednesday to Friday. In the meantime, the Bank of Thailand Governor Pridiyathorn Devakula said that the baht was weakened along with the market and the BOT had no plan to intervene. On Wednesday, there were talks in the market that Japan’s first quarter gross domestic product (GDP) would rise, creating hopes of an upturn in the Japanese economy. As well, the U.S. dollar was dampened by worries of terrorist threats and mixed economic data. Last week, U.S. retail sale and consumer sentiment showed a better-than-expected surge. Markets remained questionable about business investment and consumer spending. Consequently, the yen skyrocketed to 123.55 JPY/USD, dragging the baht up to 42.57 THB/USD in early trade. After Finance Minister Masajuro Shiokawa’s warning about the too rapid rise in JPY, the Bank of Japan intervened in the market for the first time in eight months. The dollar/yen bounced back near the level of 125 JPY/USD while the baht followed to stand around 42.80 THB/USD level. Japan’s Ministry of Finance (MOF) said later on Thursday that it had taken appropriate action in the foreign exchange market again, buying dollars for yen, after intervening on Wednesday. The dollar/yen moved near 125 JPY/USD after breaching near 124 JPY/USD in earlier trade. The baht therefore followed the yen, moving between 42.78 and 42.91 THB/USD. On Friday, the U.S. dollar got a solid support from the favourable data on business investment. U.S. durable goods orders rose 1.1 per cent in April, much better than the forecast of a 0.4 per cent. Meanwhile, Japan MOF said rapid movement in foreign exchange rate was undesirable. Also, Japanese Finance Minister Masajuro Shiokawa said he wanted foreign exchange rates to be stable, adding that the ministry was still on guard for the more rapid movement that led to its intervention in the last two days. The yen therefore was slightly above 125 JPY/USD, capping the baht steady around 42.85 THB/USD. The baht closed at 42.83/87 THB/USD on Friday. Market outlook and factors to watch (May 27 – 31, 2002) The expected range of the USD/THB is 42.60 - 42.90 THB/USD. Markets have focused on many crucial U.S. economic data releases including consumption, consumer confidence, manufacturing and employment, expecting they would show clearer signs of U.S. economic recovery. The baht direction remains tracking the yen movement.