# US inflation and Trump-Putin talks on Ukraine rattle the market

- Link: https://www.thailand-business-news.com/markets/forex-markets/194418-us-inflation-and-trump-putin-talks-on-ukraine-rattle-the-market
- Published: 2025-02-14T10:27:30+07:00
- Author: Olivier Languepin

The US inflation data pushed US long-term yields significantly higher, with the 
10-year benchmark rising roughly 10 basis points, reaching as high as 4.65% yesterday.

## Key Takeaways

Yields have surged amid mounting concerns over persistent inflationary pressures,
leading investors to reevaluate the Federal Reserve’s monetary policy path. Speculation
is growing over whether the central bank will keep interest rates elevated for a
prolonged period to effectively combat inflation. This rise in yields has also pressured
equities, as higher borrowing costs could dampen economic growth and weigh on corporate
earnings.

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 * The Thai baht weakened against the US dollar, reaching a one-week low of 34.12
   baht per dollar.
 * The US dollar strengthened due to rising trade tensions and President Trump’s
   decision to increase tariffs on aluminum imports.
 * The Thai baht is expected to trade within a range of 33.85-34.15 baht per dollar,
   influenced by factors such as US trade policies, Chinese yuan direction, and 
   Federal Reserve statements.

## Thai baht drops to a one-week low against the US dollar.

The Thai baht weakened against the US dollar, reaching a one-week low before stabilizing
around 34.06-34.08 baht per dollar. This decline aligns with a general weakness 
in Asian currencies and a strengthening US dollar. The dollar’s strength is attributed
to rising trade tensions, including President Trump’s decision to increase aluminum
tariffs and remove exemptions for certain products. Market expectations that the
Federal Reserve won’t signal a rate cut soon also support the dollar. The baht is
expected to trade between 33.85-34.15 baht per dollar, with key factors to watch
including US economic and trade policies, the Chinese yuan’s direction, Federal 
Reserve statements, and foreign capital flows.

## Euro’s Turbulence Amid Hopes for Peace in Ukraine

The euro surged sharply yesterday, reflecting the implications of the U.S. stance
on a post-Ukraine war scenario. Several euro-positive factors are driving this movement.
Optimism is growing in Europe, as an end to the war could reduce uncertainty and
potentially provide significant relief through lower energy prices, especially if
Russian energy supplies resume flowing more freely to the West in the future.

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Trump has emphasized his preference for Europe to take greater responsibility for
its own defense by strengthening its military to safeguard its borders and bolster
Ukraine’s military standing. Additionally, he suggests that the financial burden
of rebuilding Ukraine’s economy should primarily rest on the Eurozone.

Trump has also reiterated that the United States should not bear a disproportionate
share of the costs associated with European security, urging NATO allies to meet
or exceed their defense spending commitments. Furthermore, he has proposed fostering
stronger partnerships within Europe to ensure a more unified and self-reliant approach
to addressing regional security challenges and economic recovery efforts in the 
aftermath of the conflict in Ukraine.