Baht, regional currencies gain as Fed leaves rate unchanged

Economy September 23, 2016 01:00


THE Thai currency and most of its regional peers were appreciating but not at a sharp level after the US Federal Open Market Committee (FOMC) decided to leave its benchmark rate unchanged at 0.25-0.50 per cent, as expected by most investors, Bank of Thail

In addition, the Fed statement after the FOMC meeting expressed confidence in a stronger recovery of the US economy with the possibility of a rate increase later this year, she said.

The baht was yesterday trading in a range of 34.64-34.67 to the US dollar, up 0.3 per cent from a day earlier. Its volatility inched up slightly to 3.5 per cent.

Yesterday’s currency appreciation could be a short-term market response and market reaction needed to be monitored over the long term, given uncertainties in the monetary policies of the United States and other major countries, Chantavarn said.

Recently, the Bank of Japan shifted its monetary-policy framework to targeting Japan’s bond yield curve, aside from its asset purchases and a negative benchmark interest rate.

External factors continued to affect capital movement in the world markets and all parties should pay attention to foreign-exchange risk management to cope with future fluctuations, Chantavarn said.

Meanwhile, the Stock Exchange of Thailand yesterday rebounded to close at 1,505.99, up 18.82 points from Wednesday, with trade value of Bt46.45 billion. Foreign investor shows net buy Bt2 billion yesterday.

Asian equity markets also built on the previous day’s Japan-fuelled strong performance, Agence France-Presse reported.

Hong Kong added 0.4 per cent by close, with traders in the city especially cheering, as its monetary policy is linked to that of the United States.

Shanghai added 0.5 per cent by the close, Sydney rose 0.7 per cent and Wellington put on 0.4 per cent. Manila and Jakarta also saw strong gains.

Seoul surged 0.7 per cent, with troubled Hanjin Shipping the standout performer, piling on almost 30 per cent after its largest shareholder agreed to provide emergency cash to prevent it going under.