HKD/THB Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and near its recent lows.
Key drivers:
• Rate gap: The HKD is under pressure as the Hong Kong Monetary Authority's interventions push the currency against a backdrop of external economic challenges.
• Risk/commodities: Oil prices are currently above average, which can strengthen the THB due to Thailand's energy imports.
• One macro factor: Increased regulations in Thailand may limit currency volatility but could reduce investor confidence if not managed properly.
Range:
Expect the HKD/THB to move sideways within its recent range, maintaining stability between support and resistance levels.
What could change it:
• Upside risk: A clearer commitment from the HKMA or positive economic data could bolster the HKD.
• Downside risk: Continued strength in the THB and unexpected regulatory outcomes could lead to further depreciation of the HKD.
