SGD/THB Outlook: Slightly positive, but likely to move sideways due to its position above the 90-day average and near recent lows.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's accommodative stance contrasts with the Bank of Thailand's measures to control currency volatility, supporting the SGD over the THB.
• Risk/commodities: Oil prices are currently above average, which may bolster currencies of oil-importing nations like Thailand, potentially adding pressure to the THB.
• One macro factor: Recent solid economic growth in Singapore suggests resilience, which should support the SGD amid external challenges posed by US tariffs on Singaporean goods.
Range: Expect the SGD/THB rate to hold within its recent stable range, possibly drifting slightly higher given the overall economic backdrop.
What could change it:
• Upside risk: A sudden increase in global risk appetite could boost the SGD further against the THB.
• Downside risk: More aggressive actions from the Bank of Thailand to manage the currency could lead to a stronger baht, pressuring the SGD/THB rate.
