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November 7th - The impact of gold on the Thai currency has fallen to its lowest level in nearly two years, suggesting that policymakers efforts to curb the bahts appreciation may finally be starting to pay off. Data shows that the 60-day correlation between the baht and gold fell below 0.43 earlier this week, the lowest level since November 2023. The 30-day and 45-day correlations, reflecting recent volatility, also fell to their lowest levels since February. Thai authorities have been trying to weaken the bahts link to gold by encouraging gold transactions to be settled in US dollars and considering a tax on physical gold transactions. In June 2023, the 60-day correlation between the baht and gold reached 0.8. Officials said this correlation exacerbated the bahts rise to a four-year high in September, putting pressure on exports and tourism. "The risk of potential fiscal or monetary policy measures is a moral deterrent," said Kobsidthi Silpachai, head of capital markets research at Kasikornbank in Bangkok. He believes this "seems to have deterred speculators from participating in gold long and USD/THB short trades."Market news: Google will build a new artificial intelligence data center at a small outpost in the Indian Ocean off the coast of Australia.Apple: Service outage issues for Apple TV and Apple Arcade have been resolved.Japanese Prime Minister Sanae Takaichi: Striving for nominal growth rate to exceed Japanese government bond yield.November 7th, Futures News: Economies.com analysts latest view: Brent crude oil futures fell in the previous trading day as their price continued to trade below the EMA50 index, indicating a dominant short-term downtrend, with the price coinciding with the support line of this trendline. Previously, the Relative Strength Index (RSI) had moved out of oversold territory, exacerbating downward pressure on prices.

Prior to Japan's inflation data and BoJ Ueda's speech, EUR/JPY is anticipated to fall below 143.00

Daniel Rogers

Feb 23, 2023 15:00

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During the Asian trading session, the EUR/JPY is fluctuating around 143.00. The Japanese Yen bulls are attempting for the third time to drive the cross below the immediate support of 143.00, as investors anticipate that BoJ Governor nominee Kazuo Ueda will discuss an exit from the decade-long ultra-loose monetary policy managed by the Bank of Japan (BoJ).

 

The Japanese government has reiterated that the administration will pursue a change in the Bank of Japan's monetary policy under new leadership in order to increase the yen's competitiveness against other foreign exchange currencies. Therefore, BoJ Ueda's speech on Friday is expected to include additional yield-widening discussions.

 

Aside from this, Japan's National Consumer Price Index (CPI) (Jan) data will remain a focal point. The headline CPI is expected to rise to 4.5% from 4.0% in the previous release. And the core CPI, which excludes the cost of fuel and food, is anticipated to increase to 3.2% from 3.0% in the previous report. By increasing wages and consumer spending, the Japanese economy is gradually attaining a higher inflation rate.

 

According to Commerzbank economists, "patience is the name of the game." If Kuroda genuinely intended to pave the way for his successor by expanding the yield range, the BoJ's decision in early March, while Kuroda is still in charge, will be the first indication of how monetary policy will evolve. If not, we will have to wait until the end of April, when Ueda will conduct his first meeting. Even then, it is extremely unlikely that Ueda would immediately reverse monetary policy."

 

In the meantime, despite Christine Lagarde's hawkish remarks as president of the European Central Bank (ECB), the Euro is struggling to gain traction. According to ECB Lagarde, "headline inflation has begun to decelerate, but they intend to raise key rates by 50 basis points (bps) at the next policy meeting." In addition, she stated that the European Central Bank does not foresee a wage-price spiral in the Eurozone.

 

It is important to observe that the ECB has increased interest rates by 50 basis points over the past two monetary policy meetings, and a further 50 basis point increase will bring rates to 3.5%.

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