Halister News

(Bloomberg) -- The presidential election result is more likely to influence USD/THB’s short-term direction than Bank of Thailand’s policy decision this week, Bloomberg strategist David Finnerty writes.

• A Clinton victory would probably lead to general dollar strength, with USD/THB likely testing 200-DMA resistance
• A Trump win may spur dollar weakness, sending pair to 100- DMA support
  • It could result in dollar strength longer term though if his policy to encourage U.S. companies to repatriate money is passed
• USD/THB is at 35.006; 200-DMA is 35.121, 100-DMA 34.918
• BOT will leave benchmark interest rate at 1.50%, according to 21 of 22 economists in Bloomberg survey, with one predicting 25bp cut to 1.25%; decision due 2pm local time on Nov. 9
• In its September monetary policy report, the central bank said it expects headline inflation to return to lower bound of target band within this year, with timing largely dependant on movements in global crude oil prices
  • This indicates the BOT is comfortable with the inflation path and doesn’t see need to cut rates to help spur it higher; currency shouldn’t be impacted if no rate change
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.