CAD/THB Outlook: Slightly weaker, but likely to move sideways as the rate is below its recent average and near recent lows without a clear driver. Key drivers:
• Rate gap: The Bank of Canada has lowered interest rates, impacting the Canadian dollar negatively compared to the Bank of Thailand's recent rate cut aimed at supporting growth.
• Risk/commodities: Oil prices have increased, but still remain volatile, which may not significantly benefit the CAD as it experiences pressure from reduced Canadian exports.
• One macro factor: Thailand's economic growth is projected to remain below potential, but a strong current account surplus may support the baht's appreciation in the long term.
Range: Expect the CAD/THB to hold around its current levels, remaining within the recent trading range.
What could change it:
• Upside risk: Any significant recovery in oil prices could boost the CAD, making it more attractive.
• Downside risk: Further weakening in Canadian export performance or poor economic data may put more pressure on the CAD.
