Bangkok: The baht strengthened against the dollar following a decision by the Appeals Court to suspend a previous ruling of the International Trade Court, which had put a hold on the implementation of the Trump administration's tariff measures. As a result, these tariffs remain in effect under the Trump 2.0 administration, contributing to the market's uncertainty and affecting currency and commodity markets.
According to Thai News Agency, Mr. Poon Panichpibul of Krungthai GLOBAL MARKETS, Krungthai Bank, reported that the baht opened at 32.53 baht per dollar, appreciating from the previous day's close of 32.71. The baht's strengthening trend continued from the previous afternoon, influenced by a slight decline in the dollar and a rebound in global gold prices. The COMEX signal for August delivery saw an increase of $21.50, or 0.65%, closing at $3,343.90 per ounce.
The continuation of the Trump administration's tariffs, upheld by the recent court decision, has prompted market players to sell off the dollar amid the prevailing uncertainty over U.S. trade policies. The Appeals Court has set deadlines for both the plaintiffs and the U.S. government to respond by June 5 and June 9, respectively.
Additionally, the dollar faced pressure from disappointing U.S. economic data, including higher-than-expected unemployment benefit claims. This has led market participants to fully anticipate two interest rate cuts by the Federal Reserve this year, an increase from the previous 70% likelihood. The weakening dollar has also supported the baht and allowed it to test resistance levels in gold prices.
In the bond market, the yield on the U.S. 10-year bond has decreased to 4.43%. However, concerns about U.S. fiscal stability could lead to increased volatility in bond yields. Market analysts suggest that an increase in the U.S. 10-year bond yield could present buying opportunities, particularly if yields rise above 4.50%.
Despite the baht's recent gains, its appreciation may be limited due to ongoing dollar purchases by importers towards the month's end. Additionally, without new supporting factors, gold prices might face downward pressure, which could help slow the baht's rise.