EUR/THB Outlook:
Slightly positive, but likely to move sideways as the rate is just below its recent average and has traded with limited volatility. Currently, the euro is stabilizing as it faces mixed signals from economic data.
Key drivers:
• Rate gap: The European Central Bank is maintaining a dovish (supportive) stance on monetary policy while the Bank of Thailand is tightening control over the baht, creating a widening gap.
• Risk/commodities: Recent oil prices are at a three-month high, which typically supports stronger currencies like the euro; however, it hasn't translated into clear strength against the baht.
• One macro factor: Eurozone consumer confidence remains subdued, which may limit significant euro gains going forward.
Range:
Expect EUR/THB to hold near its recent average where it has consistently traded within a narrow range over the last three months.
What could change it:
• Upside risk: A substantial improvement in Eurozone economic indicators could strengthen the euro.
• Downside risk: A continued rise in the baht due to central bank interventions could pressure the euro lower.
