EUR/THB Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and near recent lows with mixed signals.
Key drivers:
• Rate gap: The European Central Bank has maintained interest rates, whereas the Bank of Thailand is tightening regulations, creating a favorable environment for the baht.
• Risk/commodities: Oil prices have been volatile, currently above average, which typically supports the euro due to import costs but may not translate into strength for the EUR/THB pair at this moment.
• One macro factor: The eurozone's inflation is below the ECB's target, raising concerns about future rate cuts that could weaken the euro further.
Range:
EUR/THB is likely to drift within its recent range, with limited movement expected given current pressures.
What could change it:
• Upside risk: An unexpected positive shift in eurozone data could boost the euro against the baht.
• Downside risk: Further geopolitical tensions or negative economic signals from the eurozone could weaken the euro relative to the baht.
