The GBP/THB exchange rate is currently range-bound, trading at 42.46, just beneath its three-month average.
Key drivers include:
- The Bank of England's dovish stance signals potential future rate cuts, which could lead to a weaker pound.
- The Thai baht may strengthen due to projected capital inflows and a current account surplus, driven by a weaker USD.
- UK inflation is expected to slow, while Thailand's GDP growth is modestly forecasted at 1.5%.
In the near term, the GBP/THB pair is likely to trade within a stable range given its recent performance.
An upside risk could arise from better-than-expected UK retail sales, boosting confidence in the pound. Conversely, a downside risk may stem from continued dollar weakness, which could impact the baht and create volatility in the GBP/THB rate.