GBP/THB Outlook:
The GBP/THB rate is slightly weaker, but likely to move sideways. Currently, it is just below its 90-day average, trading in a stable range.
Key drivers:
• Rate gap: The Bank of England's dovish outlook could widen the interest rate differential compared to the Bank of Thailand's tightening measures.
• Risk/commodities: Rising oil prices are above average, potentially supporting the Thai Baht as oil-based economies gain traction.
• One macro factor: Ongoing political uncertainty in the UK, particularly around leadership, is creating added volatility for the Pound.
Range:
The GBP/THB pair is expected to hold within its recent range rather than test extremes, reflecting the current market's cautious approach.
What could change it:
• Upside risk: Any unexpected strength in UK economic data that could alter the Bank of England's policy direction.
• Downside risk: Further political instability in the UK leading to heightened market uncertainty around the Pound.