GBP/THB Outlook:
The outlook for GBP/THB is slightly weaker, but likely to move sideways as the exchange rate is below its recent average and nearing recent lows. This situation is heightened by ongoing concerns around UK employment data affecting the pound.
Key drivers:
• Rate gap: The Bank of England's cautious stance on interest rate cuts contrasts with potential easing influencing the GBP negatively against the Thai baht.
• Risk/commodities: The rise in oil prices, now at 90-day highs, could weaken the baht as rising costs impact Thailand's economic outlook.
• One macro factor: Recent UK unemployment data hitting a five-year high signals deeper economic challenges, likely affecting the Bank of England's future policy decisions.
Range:
GBP/THB is likely to hold within its recent range as it approaches previous lows, with limited volatile movements expected.
What could change it:
• Upside risk: A surprise increase in UK inflation could boost confidence in the pound.
• Downside risk: Further deterioration in the UK labor market data could push GBP/THB lower.