Bias: CAD/THB bearish-to-range-bound, as it sits below its 90-day average and in the lower half of its three-month range.
Key drivers:
- Rate gap: The BoC remains higher than the BOT after the latest easing, keeping CAD relatively supported versus THB on the yield gap and giving CAD a bit of resilience when risk appetite is steady.
- Oil and risk: Oil trades above its three-month average with notable swings, which strengthens CAD through Canada’s oil export link and can offset modest Thai currency moves when markets are calm.
- Macro factor: The BOT cut policy rate in December, signaling continued easing that could weigh on THB and tilt the pair modestly in CAD’s favor if risk conditions hold.
Range: The pair is likely to drift within its recent three-month range, flirting with the lower end but not breaking out.
What could change it:
- Upside risk: A fresh oil rally or stronger global growth lifting risk appetite and CAD demand, pushing CAD/THB higher.
- Downside risk: Deeper Thai rate cuts or a shift to a stronger US dollar that pushes THB weaker and caps CAD upside.