EUR/THB Outlook:
Slightly positive, but likely to move sideways as the rate is just above its recent average, with mixed signals influencing performance.
Key drivers:
• Rate gap: The European Central Bank’s steady interest rate at 2% contrasts against the Bank of Thailand's interventions to manage the strong baht, creating differing monetary environments.
• Risk/commodities: The recent rise in oil prices may bolster the euro as energy costs impact inflation, whereas the stronger baht could limit the euro’s gains against it.
• One macro factor: Eurozone inflation dropped below the ECB's target, introducing uncertainty around future interest rate adjustments which could influence the euro’s performance.
Range:
EUR/THB is expected to hold within its recent stable range, given the current market dynamics.
What could change it:
• Upside risk: A significant increase in Eurozone economic growth could lead to heightened euro demand.
• Downside risk: Further strengthening of the baht due to ongoing interventions could pressure the euro lower.
