Bias: bearish-to-range-bound, CAD/THB trading below its 90-day average and in the lower half of the last three-month range.
Key drivers:
• Rate gap: BoC's policy rate remains higher than the BOT's, creating a carry edge for CAD as investors favor higher yields (carry edge means higher returns when moving money into CAD).
• Oil: Oil sits above its three-month average with bouts of volatility, supporting CAD as a commodity-linked currency and shaping funding flows for THB trades.
• Macro factor: BOT sees 2026 growth below potential, shaping a slower pace for THB.
Range: CAD/THB is likely to drift in the lower portion of the three-month range, holding near the bottom of that band unless oil or policy surprises shift the dynamic.
What could change it:
• Upside risk: A sustained oil rally and the BoC stance remaining relatively tighter than the BOT could push CAD/THB toward the middle of the range.
• Downside risk: Thai growth surprises to the upside and the BOT maintains stimulus, lifting THB and pushing CAD/THB higher.