CAD/THB Outlook: Likely to decrease, as the rate is below its recent average and influenced by lower oil prices.
Key drivers:
• Rate gap: The Bank of Canada recently cut rates, signaling a potential weakening of the CAD compared to the Bank of Thailand’s stable interest rate policy.
• Risk/commodities: With oil prices currently above their three-month average but showing recent volatility, the CAD's strength could fade if oil market conditions worsen.
• One macro factor: Thailand's economic growth is projected to remain below potential, suggesting ongoing challenges for the THB and limited upward support.
Range: The CAD/THB is likely to drift within its recent range, reflecting the current pressures without testing extremes.
What could change it:
• Upside risk: A significant rise in global oil prices could bolster the CAD.
• Downside risk: Continued trade policy uncertainty could further weaken the CAD against the THB.
