Thailand Baht: USD/THB (THB) Exports Rose, No New COVID-19 Cases
A key trade group sees a potentially healthier export picture after shipments rose for a second straight month in April, driven by farm products and gold.
Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers’ Council, said the April surprise signals that full-year exports might shrink by lower than the TNSC’s current forecast.
She cited Thailand’s strength in exporting food, electronics profitable for working at home and medical supplies like rubber gloves.
Despite the easing of lockdown measures and higher demand in many export categories, the TNSC on may 5 forecast Thailand’s shipments to contract by 8% this year.
The pandemic has ravaged major economies, particularly key trading partners like the United States, the EU and China, at the same time higher household debt and lower purchasing power worldwide are anticipated.
More notably, transport remains inconvenient in many areas because of lockdown measures, whereas the business sector’s operating costs keep rising.
The baht has started to appreciate, and global oil prices are volatile because of shrinking demand and also the conflict between the United States and Iran.
The Commerce Ministry announced yesterday that customs-based exports unexpectedly rose by 2.1% year-on-year to US$18.94 billion in April after a surprise 4.2% increase in March.
Exports of agricultural and agro-industrial products grew 4% last month to $3.73 billion, boosted by rising global food demand throughout the lockdown period. Higher shipments were led by rice (+23.1%), fresh, frozen and processed fruits and vegetables (+5.7%), fresh, frozen and processed chicken (+9.6%), pet food (+34.3%) and seasonings and condiments (+18.9%).
Exports of industrial products grew 4.1% to $14.77 billion, led by gold (+1,102.8%), aircraft and accessories (+584.7%), other vehicles and parts (+1,423.1%), semiconductor devices, transistors and diodes (+56.1%) and electric circuits (+1.8%).
“The spike in gold exports highlights the risk aversion effects arising from Covid-19 and also the global economic slowdown, leading to rising gold prices and large exports to Switzerland, Singapore and Hong Kong,” said Pimchanok Vonkorpon, director-general of the trade policy and Strategy office under the Commerce Ministry. “In addition, global oil prices have suppressed exports of oil-related products, particularly to ASEAN and CLMV markets.”
Excluding gold, oil and weaponry, April exports fell by 7.5% from the same month last year.
For the first four months of 2020, exports rose 1.2% to $81.62 billion from the same period of 2019. Excluding gold, oil and weaponry, exports fell by 0.96% within the period.
Exports to major trading partners stood out in April, particularly those to China and Japan, rebounding 9% and 9.8% respectively, while shipments to the United States and ASEAN continued to grow.
Exports to the EU, the middle East and South Asia fell in April, constrained by the pandemic and lockdown measures.
Ms Pimchanok said the coronavirus crisis has highlighted growing demand for farm products and processed foods and opened a window for Thailand to broaden market share.
“Although existing lockdowns in numerous countries have caused traffic congestion in ports and disrupted air logistics in general, the outbreak recovery and lifting of lockdowns in some countries, for instance China, Germany, Italy and New Zealand, will enable economic activity and facilitate international trade flows step by step,” she said.
“This signals positive momentum to Thai exports in the medium term. Thailand’s exports are unlikely to contract too much as many agencies forecast. If exports average $20.57 billion per month, exports are expected to shrink by only 0.5% this year.”
The CCSA on Sunday revealed no new coronavirus cases and no new deaths, maintaining the totals at 3,040 confirmed cases and 56 fatalities since the outbreak began in January.
Sunday was the fourth day this month that there have been no new confirmed cases, said Panprapa Yongtrakul, a spokeswoman for the CCSA.
A total of 2,921 patients have recovered since the outbreak started, with 63 still in hospital.
The number of new infections per day throughout the past two weeks has remained in low single digits with most new cases the result of contact with previously infected ones or through contact with crowds of individuals.
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Economic Events
Shayne Heffernan Trade Idea
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Strong domestic consumption, a strong trade surplus, and a central bank policy that has not particularly followed the quantitative easing measures of many other economies has resulted in the Baht becoming Asia’s best-performing currency.
However, with global economic pressures mounting as a result of COVID-19, the Bank of Thailand will be increasingly forced to consider rate cuts from here.
Moreover, while Thailand has seen strong foreign inflows which has pushed the currency higher.” Shayne Heffernan PhD in Economics
Technical Analysis
Overall, the bias in prices is: Sideways.
The projected upper bound is: 32.29.
The projected lower bound is: 31.59.
The projected closing price is: 31.94.
Candlesticks
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 25 black candles for a net of 3 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 33.3333. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.48. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -69. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 35 period(s) ago.
Rex Takasugi – TD Profile
FOREX THB= closed up 0.070 at 31.940. Volume was 87% below average (consolidating) and Bollinger Bands were 13% narrower than normal.
Open High Low Close Volume 31.880 31.950 31.880 31.940 356
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 31.97 32.46 31.05 Volatility: 4 7 6 Volume: 1,484 2,589 1,496
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
FOREX THB= is currently 2.9% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods.
Our volume indicators reflect volume flowing into and out of THB= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on THB= and have had this outlook for the last 23 periods.
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