AUD/THB Outlook: The outlook is slightly positive, but likely to move sideways, as the rate is above its recent average and trading near the upper end of its range.
Key drivers:
• Rate gap: The Reserve Bank of Australia is considering interest rate hikes, contrasting with the Bank of Thailand, which recently lowered rates to stimulate growth.
• Risk/commodities: Rising commodity prices have been supporting the AUD, while high oil prices, as they drive global inflation, could create uncertainty for the THB.
• One macro factor: The Producer Price Index data suggests ongoing inflation pressures in Australia, reinforcing expectations for the RBA to act.
Range: AUD/THB is expected to hold within its recent range, drifting slightly but generally stable.
What could change it:
• Upside risk: If the RBA increases rates next month, it may further enhance the AUD's appeal.
• Downside risk: A significant drop in commodity prices could pressure the AUD and lead to a weakening against the THB.
