CAD/THB Outlook:
The CAD/THB exchange rate is slightly weaker, but likely to move sideways as it trades just below its recent average and remains within the middle of its 3-month range.
Key drivers:
• Rate gap: The Bank of Canada has cut interest rates recently, while the Bank of Thailand is tightening policies to address the baht's rapid appreciation, affecting the CAD's competitiveness.
• Risk/commodities: With oil prices at recent highs, this supports the Canadian dollar, as Canada benefits from higher oil revenues, though the current price appears to keep CAD under pressure.
• One macro factor: Concerns about the Thai baht's strength impacting its export competitiveness and tourism could influence its trajectory against the CAD.
Range:
The CAD/THB is likely to hold within its recent stable range, with limited movements expected.
What could change it:
• Upside risk: A significant increase in Canadian retail sales might bolster CAD strength.
• Downside risk: Continued pressure on CAD due to further trade tensions with the U.S. could weaken its position.
