USD/THB Outlook:
Slightly weaker, but likely to move sideways as the rate is below its recent average and near 7-day lows.
Key drivers:
- Rate gap: The Federal Reserve has paused rate cuts, maintaining rates amid ongoing economic concerns, while the Bank of Thailand's interventions have helped stabilize the baht.
- Risk/commodities: Oil prices are currently above average, which can strengthen the baht by increasing export value; however, this volatility creates mixed impacts on currency stability.
- One macro factor: Reports of illicit funds being channeled into Thailand through cryptocurrencies may bolster demand for the baht, yet complicate its exchange rate dynamics.
Range:
Expect USD/THB to hold within its recent stable range, with potential fluctuations but not testing extremes.
What could change it:
- Upside risk: A significant improvement in U.S. labor market data could support the dollar's value.
- Downside risk: Continued geopolitical tensions impacting U.S. trade policies may pressure the dollar further.