AUD/THB Outlook: Slightly positive, but likely to move sideways, as the Australian dollar is currently trading above its recent average but lacks a clear driver to sustain increases.
Key drivers:
• Rate gap: The Reserve Bank of Australia's potential interest rate hike in February could support the AUD, while the Bank of Thailand is focused on tightening regulations and managing baht strength.
• Risk/commodities: Recent volatility in oil prices may affect the AUD, with oil currently trading significantly above its average, influencing investor interest in commodity exports from Australia.
• One macro factor: China's manufacturing PMI could weigh on the AUD if further data confirms weak factory activity, impacting Australia's export outlook.
Range: Expect the AUD/THB to hold within its recent range, given current trading levels and lack of strong directional influences.
What could change it:
• Upside risk: A surprise interest rate hike from the RBA earlier than expected could boost the AUD.
• Downside risk: Continued weakness in China's economic indicators could increase pressure on the AUD, dragging it lower.
