Thai Baht: Benign inflation keeps BoT on hold – Commerzbank

FXStreet Insights Team FXStreet

Commerzbank strategists note July Consumer Price Index (CPI) eased to 2.0% year-on-year, below consensus, mainly due to softer retail fuel prices. While core CPI has been gradually rising, overall price pressures are described as manageable and below government forecasts. The Bank of Thailand (BoT) is expected to keep its policy rate at 1% through year-end, with subdued demand limiting the need for tightening.

Soft CPI and steady policy outlook

"July CPI surprised to the downside, rising 2.0% yoy (Bloomberg consensus: 2.4%) vs 2.4% in June, marking the lowest reading since March."

"Nonetheless, price pressures remain manageable, with core CPI averaging 0.8% in the first seven months of the year, below the government's full-year core inflation forecast of 1.5%."

"On monetary policy, Bank of Thailand (BoT) is expected to stay on hold at 1% for the rest of the year. Given the benign inflation backdrop, there is little reason for BoT to tweak monetary policy for now. BoT Assistant Governor Don Nakornthab recently stated that inflation remains under control and could undershoot earlier expectations amid subdued demand-side pressures."

"In FX, USD/THB fell 0.2% to 33.00 yesterday, its lowest level since 22 June. The THB has strengthened over the past four sessions, supported by rising global gold prices. Nonetheless, it remains the third worst-performing Asian currency this year. Year-to-date, THB has fallen 4.5% vs the USD, compared to an average decline of 1.9% for Asian currencies ex-Japan."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD clings to 1.3500 amid marginal losses

GBP/USD alternates gains with losses around the 1.3500 neighbourhood on Tuesday. Indeed, Cable struggles to further extend its incipient recovery in a context of continuous instability in the Middle East and modest gains in the Greenback.

EUR/USD alternates gains with losses near 1.1540

EUR/USD navigates a tight range near 1.1550 in the latter part of Tuesday’s NA session. The US Dollar’s vacillating price action accompanies the pair while market participants gear up for the crucial US inflation data due on Wednesday.

Gold loses the grip below $4,400

Gold retreats from its earlier tops and briefly revisited the $4,350 region per troy ounce on Tuesday. The yellow metal’s modest retracement follows lacklustre gains in the US Dollar and declining US Treasury yields across the curve, all amid steady uncertainty from the geopolitical landscape.

Shiba Inu Price Forecast: SHIB extends sell-off despite surging futures Open Interest

Shiba Inu (SHIB) maintains a bearish outlook on Tuesday, as it edges lower at $0.00000450. This marks the seventh day the meme coin has sustained a sell-off, weighed down by a weak technical structure. Shiba Inu derivatives continue to gain momentum, with perpetual futures Open Interest (OI) rising to 11.08 trillion SHIB on Tuesday, from 10.46 trillion the day before.

The inflation narrative is still way more important than the employment story

Core bonds sold off yesterday with the belly of the curve slightly underperforming in the US while European curves showed more of a bear flattening. Daily changes on the US curve varied between +4.7 bps (2-yr) and +6.4 bps (7-yr).

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.