Kasikorn Research Center reported that the baht this morning stood at about 33.11-33.13 per dollar, weakening from yesterday's market close of 32.94 per dollar. The baht has returned to trading on the weaker side of the 33.00 per dollar level, while the dollar drew support from the US producer price index for August, which came in higher than expected at 5.4% year on year, against a market forecast of 5.3%. As a result, the market now expects a greater chance that the US will raise its policy interest rate at next week's FOMC meeting. The dollar also received a boost from higher global oil prices and rising US bond yields, with the 2-year yield up 16 basis points to 4.59% and the 10-year yield up 12 basis points to 4.96%. For today, the baht is initially expected to move within a range of 33.05-33.20 per dollar. Factors to watch include the situation in the Middle East, the direction of the yen and gold prices, foreign fund flows, and US economic data such as the August consumer price index and the preliminary September consumer sentiment index.
Hotter-than-expected US PPI and rising Fed hike odds push the 10-year Treasury yield up 12bp to 4.96%.
August PPI beat and greater chance of a Fed hike next week lift the 2-year yield 16bp to 4.59%.
