USD/THB Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Federal Reserve has paused rate cuts, providing support to the USD, while the Bank of Thailand is tightening regulations affecting currency stability.
• Risk/commodities: Oil prices are above average, increasing the likelihood of a weaker baht, as higher oil import costs may pressure the Thai economy.
• One macro factor: Record high gold prices are strengthening the baht, but the impact on exports and tourism could limit further appreciation.
Range: The USD/THB is expected to hold within its recent range as it navigates challenges from competing currency influences.
What could change it:
• Upside risk: Strong US economic data could boost the dollar's appeal.
• Downside risk: Continued appreciation of the baht due to gold market dynamics could pressure the USD/THB.
