EUR/THB Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and near mid-range levels.
Key drivers:
• Rate gap: The European Central Bank is maintaining a cautious policy stance, which contrasts with the Bank of Thailand tightening regulations and its support for the baht.
• Risk/commodities: The euro is facing pressure from a stronger US dollar, which typically impacts its value against other currencies, while rising oil prices may strengthen the baht due to its effect on the Thai economy.
• One macro factor: Thailand's fiscal policy office anticipates a stronger baht influenced by higher gold prices, which are currently at a record high.
Range: EUR/THB is likely to drift within its stable 3-month range, currently trading towards the upper end.
What could change it:
• Upside risk: A significant rebound in eurozone economic data, such as stronger retail sales, could boost the euro.
• Downside risk: Continued strength of the US dollar or unexpected shifts in Thailand's fiscal policy could weaken the baht's outlook against the euro.