Bias: The bias is bearish-to-range-bound as the SGD is below the 90-day average and sits in the lower half of its 3-month range.
Key drivers:
- Rate gap: The Monetary Authority of Singapore's recent accommodation contrasts with the Bank of Thailand's rate cut, highlighting a shifting balance in monetary policy approaches.
- Risk/commodities: Oil trades above its 90-day average, which may elevate Thai inflation pressures and strengthen the Baht against the SGD.
- Economic growth projections: Thailand’s economy is expected to grow below potential, which suggests ongoing challenges for the Baht.
Range: The SGD/THB pair is likely to hold within its current range after recent fluctuations, possibly testing upper resistance levels if conditions improve.
What could change it:
- Upside risk: Increased capital inflows to Singapore could push the SGD up against the THB.
- Downside risk: Further easing of monetary policy in Singapore could weaken the SGD's position against the Baht.
