EUR/THB Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank (ECB) has maintained interest rates amid a resilient Eurozone economy, while the Bank of Thailand's recent interventions aim to manage the baht's strength.
• Risk/commodities: Oil prices have surged above their average, which could support the euro indirectly through energy trade dynamics.
• One macro factor: Eurozone inflation has dropped to 1.7%, raising concerns about potential future ECB rate cuts, which could influence euro's strength.
Range:
EUR/THB is likely to test recent levels while remaining within the stable 3.8% range observed.
What could change it:
• Upside risk: Any stronger-than-expected economic data from the Eurozone could prompt the ECB to reconsider tightening measures.
• Downside risk: Signs of sustained economic weakness or further strength in the baht could lead to increased volatility and pressure on the euro.