Bias: Bearish-to-range-bound, CAD/THB sits below its 90-day average and in the lower half of the last three months’ range.
Key drivers:
- Rate gap: The Bank of Canada’s policy rate remains higher than the Bank of Thailand’s, supporting CAD versus THB in a higher-rate environment for cross-border trades.
- Risk/commodities: Oil is at 90-day highs and above its 3-month average, with volatility; as a commodity-linked currency, CAD tends to strengthen when oil rises, especially for exporters.
- Macro: BOT easing and a healthy current-account surplus underpin THB, helping the Thai currency withstand external shocks and attract inflows.
Range: The pair is likely to drift within the recent three-month range, with a tendency to test the lower edge if CAD weakness persists, barring oil surprises.
What could change it:
- Upside risk: oil staying firm or rallying could push CAD higher against THB, supporting cross-border payments and hedging needs.
- Downside risk: a pullback in oil or a stronger U.S. dollar would weigh on CAD and push the pair lower, complicating imports and remittances.