GBP/THB Outlook:
The GBP/THB exchange rate shows a slightly positive outlook as it trades just below its recent average and remains near the mid-range of its 3-month fluctuation. Nonetheless, recent UK political uncertainties may create volatility.
Key drivers:
• Rate gap: The Bank of England appears more dovish, suggesting potential interest rate cuts, while the Bank of Thailand has tightened currency controls to manage the THB's strength.
• Risk/commodities: Oil prices are at significant highs, which generally strengthens the THB; however, elevated oil prices might undercut UK economic prospects.
• One macro factor: Political instability in the UK, particularly surrounding the leadership of Keir Starmer, introduces uncertainty that could pressure the GBP.
Range:
Expect GBP/THB to hold steady around its current level, as it trends within its recent 4.1% movement range.
What could change it:
• Upside risk: A decisive victory for Labour in the by-election could bolster GBP confidence.
• Downside risk: Continued political upheaval in the UK or disappointing economic data could weigh further on the GBP.
