The current bias for the EUR to THB exchange rate is bearish.
Key drivers include:
- Recent data showed a contraction in German exports and slower retail sales in the Eurozone, dampening confidence in the euro's strength.
- The Bank of Thailand cut interest rates to stimulate a sluggish economy, which could pressure the baht but may not be enough to stabilize the EUR against THB.
- Eurozone inflation is projected to decrease gradually, while Thailand faces economic growth below potential, limiting support for either currency.
In the near term, expect the EUR/THB to trade in a stable range, likely reflecting recent performance below its three-month average.
Upside risks include the potential for improved economic conditions in the Eurozone, while downside risks are tied to ongoing geopolitical tensions and weak economic indicators affecting the euro's trajectory. Increased oil prices may also influence movements, given their correlation to currency changes, particularly for the Euro.