AUD/THB Outlook:
The AUD/THB exchange rate is currently slightly positive, trading well above its 90-day average and near the recent highs. However, recent geopolitical uncertainties pose a potential risk that could influence the rate's movement.
Key drivers:
• Rate gap: The Reserve Bank of Australia's interest rate hike indicates a supportive environment for the AUD compared to the Bank of Thailand's tighter currency controls.
• Risk/commodities: Oil prices are volatile but remain significantly above their 3-month average, which could boost demand for the AUD as a commodity currency.
• One macro factor: Recent reports of illicit funds affecting the THB's strength may hinder its stability, creating room for the AUD to gain further.
Range:
Expect the AUD/THB to hold within its recent 3-month range with potential to test the higher end.
What could change it:
• Upside risk: A further increase in Australian interest rates could enhance the AUD's appeal.
• Downside risk: Renewed geopolitical tensions could shift investor focus back to safer assets, weakening the AUD.