Bangkok: The Thai baht weakened to 33.40 baht per dollar, driven by a stronger US dollar following the Federal Reserve's recent interest rate hike. The currency movement aligns with trends observed in other Asian currencies, as the US dollar gains momentum in response to the Federal Reserve's 0.25% interest rate increase and its indication of ongoing monetary policy tightening.
According to Thai News Agency, the Kasikorn Research Center noted that the Thai baht was trading at approximately 33.38-33.40 baht per US dollar earlier today, weakening from the previous day's closing level of 33.28 baht per dollar. This development is attributed to the US dollar index rising above 100, reaching 100.30.
The dollar's strengthening occurred after the Federal Reserve unanimously decided to raise its policy interest rate by 0.25%, setting it within the range of 3.75-4.00%. The Fed also suggested through the Dot Plot that another rate hike might occur before the year's end, driven by concerns over persistently high inflation.
Additionally, the Fed adjusted its GDP and inflation forecasts upwards while lowering its unemployment forecast, signaling a more optimistic view of the U.S. economy. In response, several central banks, including the Hong Kong Monetary Authority, increased their interest rates, with the latter raising its rate by 0.25% to 4.25%.
For today's trading range, the Thai baht is projected to be between 33.30 and 33.50 baht per US dollar. Key factors to watch include foreign capital flows, Middle East tensions, the results of the Bank of England meeting, and significant economic data from the US and Europe.