Baht holds steady as US shutdown spooks global markets
Central bank urges caution as firms face rising external risks
Thailand’s central bank reassured the public that no irregularities have been seen in local markets after the US shutdown triggered global financial jitters.
The shutdown, which began after the US Senate failed to approve a temporary spending bill, has unsettled international markets and raised concerns over delayed economic data critical to the Federal Reserve’s monetary policy decisions.
Yesterday, October 1, the US dollar slipped to a one-week low against major currencies. The dollar index, which tracks the greenback against six leading currencies, fell by 0.2%. Safe-haven assets such as the Japanese yen and Swiss franc gained ground, with the dollar losing 0.5% against the yen and 0.2% against the franc.
Meanwhile, gold and US Treasury yields remained relatively stable.
Jane Foley, chief currency strategist at Rabobank, said the market was uncertain whether to be nervous.
“It’s not evidently clear that there is a strong safe-haven bid. There are small indications of this.”
The shutdown may also halt the release of crucial government data, including nonfarm payrolls, making it harder for the Fed to gauge the strength of the US economy. The Labour and Commerce departments have already indicated they would suspend data publication if the shutdown persists.
On Tuesday, September 30, mixed signals from the US job market added further pressure on the dollar. While job openings rose slightly in August, hiring declined, reinforcing signs of a softening labour market.
In the absence of official data, traders are now looking to private reports, such as the ADP employment report, due later this week, for insight into labour conditions.
Market participants continue to price in a near-certain 25-basis-point rate cut at the Fed’s upcoming policy meeting, with odds at 95%, according to LSEG data.
In contrast, speculation is growing that the Bank of Japan (BOJ) may raise interest rates. The BOJ’s latest tankan survey showed rising confidence among large manufacturers, and officials have recently adopted a more hawkish tone, reported Bangkok Post.
Despite political uncertainty in the US, the euro climbed 0.25% to US$1.1763, reaching a one-week high. Traders appeared to shrug off data showing a contraction in eurozone manufacturing.
The Bank of Thailand has so far remained calm, but officials warn of potential spillover effects if global uncertainty deepens.
Latest Thailand News
Follow The Thaiger on Google News:
