Forex

Domestic gold prices are on track to post a positive return for an eighth consecutive year. As of October 8, 2026, gold prices had risen by about 900 baht, and looking back at October data over the past five years, from 2021 to 2025, gold rose in four of those years and fell in only one, delivering positive returns in 80% of the period under review. In 2025, prices surged by 3,000 baht to 61,400 baht, while 2024 was the only year to decline, falling 500 baht. Gold nonetheless climbed to a yearly peak of around 81,950 baht before correcting. On the morning of October 8, 2026, 96.5% gold bars were bought back at 65,650 baht and sold at 65,850 baht. The key supporting factor is the direction of Federal Reserve monetary policy, after U.S. nonfarm payrolls for September rose by only 29,000 and the unemployment rate climbed to 4.2%, prompting the market to sharply scale back expectations for an October rate hike. Meanwhile, a World Gold Council survey of 74 central banks found that 45% plan to increase their gold holdings over the next 12 months, the highest share since the survey began in 2018, and China added about 740,000 ounces, or roughly 23 tonnes, to its gold reserves in September, a 23rd consecutive month of increases. Pressures still come from U.S. bond yields, Brent crude oil prices back above 100 dollars a barrel, and technical signals after prices broke below support at 4,200 dollars an ounce on September 28. Gold must break through 4,200 dollars to confirm a short-term recovery and 4,540 dollars to confirm a medium- and long-term uptrend.

India has announced new measures to support the rupee, which has weakened by more than 7% since the start of this year, amid pressure from surging oil prices and rising global bond yields, with the currency trading near a record low. The measures announced by the Reserve Bank of India on October 10 will help reduce demand for US dollars in the foreign exchange market. The central bank will open a special channel to supply US dollars according to daily demand to three state-owned oil marketing companies, instead of having these companies buy dollars in the spot market. The companies granted access to the channel starting Monday, October 12, are Indian Oil, Hindustan Petroleum, and Bharat Petroleum. The central bank will allocate US dollars directly to these companies from its foreign exchange reserves. Diraj Nim, a foreign exchange strategist at ANZ bank in Mumbai, said that supplying US dollars directly to the oil companies will reduce demand for foreign currency from one of the largest groups of buyers in the market, which should help reduce currency volatility. However, this measure will also reduce India's foreign exchange reserves. After the announcement, the rupee strengthened by about 0.6% against the US dollar in the non-deliverable forward market, although trading in that market remained thin.

Europe's political class is showing the first signs of bending to the will of an unforgiving bond market, with budget policies and discourse from London to Paris and Rome taking baby steps toward prudence as surging yields and soaring interest-rate costs drum up memories of the euro-zone debt crisis. France's budget aimed at shrinking its bloated deficit, and signs of pragmatism from far-right presidential challenger Marine Le Pen, suggest retreats from profligacy, while Prime Minister Andy Burnham's proposal to end the UK's totemic triple-lock state pension regime and Italy's pared-back defense borrowing do so too. The budget presented a week later featured 43 billion euros, or 48.3 billion dollars, in measures to bring the deficit down to 5% next year from 5.4%, a plan touted by Finance Minister Roland Lescure as a significant effort, while Le Pen's own proposals for a deficit cut to as low as 3.7% in 2027 similarly amount to an ostensible concession toward prudence. In Italy, the widening spread last week appeared to have concerned Prime Minister Giorgia Meloni enough to prompt a last-minute cutback in defense borrowing totaling as much as 8 billion euros, with Rome now intending to spend 0.6% of output on more military outlays over two years, down from 0.9%. France stood out in the bond slump, with the extra yield demanded by investors to hold French 10-year bonds compared with those of Germany hitting its highest since 2011, while the UK has seen its own bond yields hit multi-decade highs, with pricing that includes what Bloomberg Economics calculates as a 30 basis-point risk premium to reflect in particular the policy missteps of former prime minister Liz Truss.

The Canadian dollar weakened on Friday after an unexpectedly sharp decline in employment reinforced concerns about the domestic economy and reduced expectations for a Bank of Canada interest-rate hike this month. Canada's economy lost 68,300 jobs in September, Statistics Canada reported, sharply missing economists' expectations for a gain of 9,200 positions, following a loss of 41,700 jobs in August and bringing employment losses to 110,000 over two months, while the unemployment rate rose to 6.5% from 6.4%. The disappointing report complicated the Bank of Canada's policy outlook ahead of its October 28 meeting, as a weakening labour market could discourage policymakers from raising interest rates even as persistent inflation risks and elevated energy prices remain concerns. Job losses were concentrated in the public sector, particularly healthcare, social assistance and education, while manufacturing employment declined by 12,700 positions and employment among young people aged 15 to 24 fell by 48,000. Average hourly wages for permanent employees rose 2.3% year over year in September, accelerating from 2.0% in August, and oil prices also weighed on the currency as Brent crude fell towards $103 a barrel and U.S. West Texas Intermediate traded near $91 after U.S. President Donald Trump said Washington would not attack Iran before the November midterm elections.

The dollar rose today, buoyed by remarks from Christopher Waller, a member of the Federal Reserve Board of Governors and a permanent voting member of the Federal Open Market Committee, who voiced support for the Fed raising interest rates. As of 8:10 p.m. Thailand time, the dollar index was up 0.14% at 102.28, while the dollar gained 0.09% to 1.120 against the euro and strengthened 0.26% to 158.27 yen. Waller said the Fed may need to raise rates further to bring inflation back to its 2% target if economic data continue to come in as expected, and that tighter monetary policy may be needed to keep prices stable. In addition, the Fed's meeting minutes signaled that policymakers see inflation as the biggest risk to the U.S. economic outlook. Investors increased their bets that the Fed will hold rates steady at its October meeting after the Institute for Supply Management's U.S. services index fell to 54.9 in September, below the expected 55.2 and down from 55.4 in August. Most recently, the CME Group's FedWatch Tool indicated that investors assign an 80.6% probability to the Fed holding rates at 3.75-4.00% at its October meeting, and a 70.2% probability to the Fed raising rates by 0.25% to 4.00-4.25% at its December meeting. The market is watching next week's releases of the consumer price index and producer price index ahead of the Fed's monetary policy meeting on October 27-28.

US Treasury yields rose today after the market digested the results of this week's bond auctions. As of 6:51 p.m. Thailand time, the yield on the 10-year Treasury stood at 5.244%, while the 30-year Treasury yield stood at 5.617%. On Thursday, the US Treasury sold 22 billion dollars of 30-year government bonds, with indirect bidders, including foreign central banks, purchasing more than 72% of the amount offered in the auction, above the average of 68% across the past 10 auctions. On Wednesday, the US Treasury sold 39 billion dollars of 10-year government bonds. Investors are also watching the situation in the Middle East, after US President Donald Trump confirmed that the United States will not attack Iran before the US midterm elections. Meanwhile, Christopher Waller, a member of the Federal Reserve Board of Governors and a permanent voting member of the Fed's monetary policy committee, voiced support for a Fed rate hike, saying the Fed may need to raise interest rates further to bring inflation back to the Fed's 2% target, provided the economic data due out in the coming days continues to come in as expected. Investors are watching next week's releases of the consumer price index and the producer price index, which will indicate the direction of interest rates, ahead of the Fed's monetary policy meeting on October 27-28.

Japan Post announced on the 9th that it will raise international mail rates on February 1 next year. Due to sharply higher delivery costs amid inflation and the weak yen, rates will increase by an average of about 37%. This will be the first revision of international mail rates since October 2023. International Express Mail Service will rise by an average of about 37%, parcels by 39%, and ordinary mail such as postcards by 35%. For EMS, the pricing structure for items weighing 6 kilograms or less will change, with the weight increments revised from 100 to 500 grams to 1 kilogram. Sending a 5.5-kilogram item from Japan to the United States will cost 21,400 yen, up from the current 16,300 yen. The company said the move is aimed at maintaining the stable provision of international mail services. Domestically as well, the cash-registered-mail envelopes and large cash envelopes will rise from 21 yen to 30 yen on April 1 next year.

The People's Bank of China issued a statement rejecting accusations that China deliberately weakens the yuan to gain a trade advantage, after the European Union called on Beijing to let the currency strengthen in order to reduce a record-high trade surplus. The statement said China has no need or desire to weaken its currency to gain a competitive trade edge, and has never pursued devaluation to compete with other countries. It added that blaming another country's currency for a loss of competitiveness, which leads to weaker fiscal and monetary discipline and complex structural problems, amounts to shirking responsibility for necessary adjustment. The episode comes as Maros Sefcovic, the EU's trade chief, visits Beijing to discuss ways to narrow the bloc's trade deficit with China. In 2025, China posted a record trade surplus of nearly 1.2 trillion dollars, equal to roughly 6% of gross domestic product. The European Union, meanwhile, is concerned about its trade imbalance with China, which stood at 360.6 billion euros, or 404 billion dollars, in 2025, up 15% from a year earlier. The worry is that this could lead to a new China Shock 2.0, after another wave of Chinese exports floods into markets and rattles the industries and economies of trading partners. Earlier, in June, European Central Bank President Christine Lagarde urged world leaders to discuss the yuan being undervalued, which she cited as one factor behind imbalances and a risk to the global economy.

Patrick Poullie, Head of Financial Markets at Siam Commercial Bank, or SCB, said the bank estimates the baht will move within a range of 33.25 to 33.85 per US dollar for the remainder of this year, noting that external factors, especially the war in the Middle East and the direction of global interest rates, remain the main pressures, causing the baht to swing with crude oil prices and the strengthening of the US dollar after the Federal Reserve signalled continued tight monetary policy to curb inflation. In the short term, the baht may weaken on periodic war concerns and the US election in November, as well as the risk that the US may raise tariffs on imports from Thailand under Section 301. However, a sharp spike in oil prices is less likely, and Thailand's trade balance tends to improve late in the year, supported by August export figures that grew faster than expected. For the outlook in 2027, SCB estimates the baht will weaken again, reaching 33.80 per US dollar in the first quarter and possibly approaching 34.50 per US dollar in the third quarter before gradually strengthening slightly late in the year, given US government bond yields that are likely to hold at high levels and a Thai economy still recovering unevenly, or in a K-shaped recovery, relying mainly on electronics exports and the US market, while domestic consumption and the labour market recover slowly. These factors will likely lead the Monetary Policy Committee to hold the policy rate at 1.0%, keeping the interest rate differential between Thailand and other countries a pressure on the baht. Nevertheless, factors that could reverse and support the baht next year include the chance that the Fed may raise rates only once, fewer than the market's expectation of three times, as well as the risk that the US government may face a temporary shutdown and that the war situation may ease until oil prices return to normal levels. Wachiravat Banchuen, a senior financial markets strategist at SCB, added that long-term US government bond yields have surged to their highest in more than two decades, driven by high fiscal deficits, a wave of corporate bond issuance, especially by large technology companies raising funds for AI, and inflation concerns from the war. He estimates the yield curve will tend to steepen, with two-year bond yields possibly declining gradually to 4.15-4.35% by late 2027 in line with a slowing US economy, while 10-year bond yields will fall only limitedly and remain high at 4.70-4.90%. For the US presidential election, the base case assumes the Democratic Party will win a majority in at least one chamber, which would check the government's power and make new fiscal stimulus harder, reducing government spending and possibly helping push long-term bond yields somewhat lower. The probability of a Democrat Sweep is put at 55%, and the case of Democrats taking the lower house while Republicans hold the Senate at 35%. However, if a Republican Sweep occurs, with a probability of about 10%, it would be an upside risk that drives government bond yields and the dollar sharply higher on concerns over rising fiscal deficits. In addition, the euro has faced heavy selling pressure recently from high energy prices and political uncertainty, especially in France, where investors worry about a change of government next year that could affect public debt and the budget deficit. If the far-right or far-left wins the election, it would widen the spread between French and German bond yields and drag the euro lower, but if centrist parties retain power, it would reduce political risk and help the euro recover somewhat amid lingering fiscal challenges.

The National Bank of Romania kept its policy rate unchanged at 6.50% and reinforced a hawkish stance, according to Societe Generale strategists, who said earlier inflation risks are now part of the baseline. The French bank's analysts framed the decision as supportive of Romanian Leu assets, pointing to coalition hopes as a factor behind the currency's outlook. The NBR's move leaves the benchmark rate at its existing level while signaling a firmer tone on inflation. Societe Generale's assessment ties the central bank's stance directly to the prospects for RON-denominated assets.

ING strategist Frantisek Taborsky expects the National Bank of Poland to delay rate hikes until early 2027, with government fuel-price measures allowing policymakers to remain patient. He sees the EUR/PLN trading range shifting higher to 4.380–4.400 amid a strong US Dollar, rising energy prices and risk aversion. The call comes as the Romanian Leu awaits political clarity.

Yaskawa Electric announced on the 9th that it has raised its consolidated net profit forecast under international accounting standards for the full fiscal year ending February 2027 to 47.5 billion yen, up 34.8 percent from the previous year, from its earlier projection of 47 billion yen. The revised forecast exceeds the average of 44.8 billion yen from net profit estimates by 18 analysts compiled by IBES. The company said it expects higher sales revenue as exchange rates continue to run at a weak yen level. Net profit for the interim period from March to August 2026, also announced the same day, came to 18.9 billion yen, up 4.1 percent from a year earlier.

Daniel Ivascyn, chief investment officer of Pimco, the giant US bond manager, said the 10-year Treasury yield could rise to 6 per cent for the first time since 2000, citing inflation worries driven by high oil prices and concerns over the expansion of US public debt. The 10-year Treasury yield has risen about 120 basis points so far this year and is trading just below the 5.34 per cent level hit last week, its highest since 2002, and now stands at 5.29 per cent. In an interview with the Financial Times published on the 9th, Ivascyn pointed to factors including hedge funds unwinding loss-making bond positions, saying a sharp short-term rise from current levels is 'realistically possible' and that 'reaching it is quite possible.' He noted that further increases in Treasury yields could weigh on risk assets such as equities and corporate bonds, and that a rise above 5.5 per cent would likely trigger 'a significant decline in both the credit and equity markets.' Global bond markets have come under strong selling pressure this year as soaring energy prices stoke inflation and the artificial intelligence boom boosts economic growth, with the 10-year Treasury yield recording its biggest quarterly rise of the century in the third quarter.

Shares of Central Retail Corporation, or CRC, rose 6% after InnovestX Securities said same-store sales growth accelerated to 4% in September from 1.5% in July and August. It expects same-store sales growth in the third quarter to be the most outstanding in the retail sector, while the company's flood-related impact has been limited, leading it to expect strong third-quarter profit growth. The main supporting factors are same-store sales growth, improving margins, and the weaker baht, which boosts revenue from its Vietnam business.

Japan's Ministry of Internal Affairs and Communications reported that household spending in August, adjusted for inflation, fell 3.1% year on year, marking a ninth consecutive monthly decline, as persistent inflation continues to weigh heavily on consumers' purchasing power even as wages rise. The figure was a smaller drop than the 3.6% economists had expected. Household spending data is a key gauge of private consumption, which accounts for more than half of Japan's gross domestic product. This fragile spending has created challenges for the Bank of Japan's communications, as it may raise its policy interest rate again. Bank of Japan Governor Kazuo Ueda has repeatedly warned of the risk that inflation could accelerate, and investors widely expect the central bank to raise its policy rate once more before the end of the year. In addition, Japan's aging society is a factor, since the growing ranks of retirees do not benefit from wage growth.

Eurozone finance ministers and the European Central Bank on the 8th urged France to pass its 2027 budget plan in order to stabilise the government bond market. French government bond yields have reached their highest level in about 25 years amid concerns over the huge fiscal deficit and next year's presidential election, spreading unease through financial markets. The two sides held their monthly meeting in Luxembourg on the afternoon of the 8th and discussed the sharp rise in France's borrowing costs. EU Economic Commissioner Valdis Dombrovskis said at a press conference that it is important for countries carrying high levels of deficits and debt to pursue prudent fiscal policies, and that he is in contact with Economy and Finance Minister Roland Lescure. France stated in September that its 2026 fiscal deficit is expected to exceed the government's target of 5%, and it plans to issue a record 340 billion euros, or 381 billion dollars, in government bonds in 2027. The ECB has the means to make purchases through its TPI tool if the region's government bond market becomes extremely unstable, but according to officials, no eurozone institution is prepared to help lower France's borrowing costs, and the stance is that France should resolve the uncertainty it has created itself.

St. Louis Fed President Musalem said on the 8th that the Federal Reserve will need to raise interest rates further to bring inflation back to its 2% target. Speaking at a Bloomberg-hosted event in New York, Musalem said "additional tightening will be necessary to return inflation to target in a timely manner." Regarding the Federal Open Market Committee meeting on the 27th and 28th, he said only that he approaches every meeting with a very open mind and holds no preconceptions. Musalem does not have a vote on the FOMC this year.

In the minutes of its September 9-10 policy meeting published on the 8th, the European Central Bank said all members agreed that inflation risks are tilted further to the upside, given extremely large swings in energy prices and widespread uncertainty. The ECB decided at that meeting to raise its policy rate by 0.25 percentage points, and with inflation already running at nearly twice its 2% target and likely to rise further on the back of high energy prices, the market expects another two to three rate hikes. The Governing Council was on alert for indirect and second-round effects as high energy costs feed through to other goods and services prices and to wages, but it also judged that a significant acceleration in wages or broad-based price increases has not clearly materialised at this point. On the economic outlook, it said risks remain tilted to the downside but are more balanced than before, and it noted arguments that even a slowdown in the momentum of the global artificial intelligence boom would weigh on the euro area's growth prospects, and that further rises in long-term interest rates could hurt growth. On the fiscal front, it said recent increases in government spending and rising long-term government bond yields could heighten vulnerabilities over time, stressing the importance of maintaining sound public finances and saying fiscal responses to the energy shock should be temporary and targeted.

The yield on the 10-year U.S. Treasury note climbed above 5.3% today after Christopher Waller, a member of the Federal Reserve Board of Governors and a permanent voting member of the Federal Open Market Committee, voiced support for the Fed raising interest rates. As of 10:15 p.m. Thailand time, the 10-year Treasury yield stood at 5.305%, while the 30-year Treasury yield was at 5.663%. Speaking at the Istanbul Economic Forum, Waller said the Fed may need to raise rates further to bring inflation back to its 2% target, provided the economic data due out in the coming weeks continue to come in as expected. He noted that the increases need not come in consecutive meetings, but should be carried out within an appropriate timeframe. He also said he supports a rate hike in September, not only because of the August consumer price index data but also because months of evidence show hiring remains strong and inflation has stayed persistently high. He expressed concern that the recent pickup in inflation is pushing consumers, investors, and businesses that set prices for goods and services to raise their expectations for future inflation.

Christopher Waller, a member of the US Federal Reserve's Board of Governors and a permanent voting member of the Fed's rate-setting Federal Open Market Committee, said the Fed may need to raise interest rates further to bring inflation back to its 2% target if upcoming economic data continue to come in as expected. Speaking today at the Istanbul Economic Forum, he said rate increases need not come at consecutive meetings but should be delivered within an appropriate timeframe, and he backed a rate hike in September, not only because of the August consumer price index data but also because of months of evidence showing hiring remains strong and inflation persistently high. Waller did not express concern that tighter financial conditions would significantly slow the US economy, since economic activity has picked up in the second half of the year, but he warned that the recent rebound in inflation is pushing consumers, investors and businesses that set prices for goods and services to raise their expectations for future inflation. He added that Fed officials' rate projections can reflect the direction of monetary policy, but future rate decisions will depend mainly on economic data.

Nordea Chief Analyst Jan von Gerich reads the European Central Bank's September monetary policy account as supporting further rate hikes, likely in December and March. The Governing Council remains focused on upside inflation risks, especially from persistent energy shocks and resilient growth. Nordea describes the central bank's communication as neutral.