SGD/THB Outlook: Slightly positive, but likely to move sideways as the rate is near its recent average while influenced by mixed economic signals.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has shifted to a more accommodative policy, contrasting with the Bank of Thailand's recent interest rate cut aimed at boosting growth.
• Risk/commodities: Oil prices are currently elevated which may support the Thai Baht due to its impact on inflation and trade balance, although it has caused volatility.
• One macro factor: Thailand's GDP growth is projected to be below potential, indicating economic challenges that may limit the Baht’s strength.
Range: Expect the SGD/THB to hold within the current stable range as it navigates mixed signals impacting both currencies.
What could change it:
• Upside risk: A rebound in Singapore’s economic growth could strengthen the SGD.
• Downside risk: Continued challenges in Thailand's economy could lead to further pressures on the THB.
