Bias: Bearish-to-range-bound, USD/THB below its 90-day average and in the lower half of the three-month range.
Key drivers:
- Rate gap: The US Federal Reserve is expected to ease gradually this year, while the Bank of Thailand has already eased, narrowing the policy gap but leaving the dollar modestly supported vs THB.
- Oil/commodities: Oil sits near 90-day highs with higher volatility, a move up tends to weigh on EM currencies and keep USD bid against THB.
- Macro factor: Thailand’s external position improves with a current account surplus, supporting baht resilience as the year progresses.
Range: USD/THB likely drifts toward the lower end of the recent range and stays within it.
What could change it:
- Upside risk: stronger US payrolls data with hawkish Fed signals could lift the dollar.
- Downside risk: Thai growth surprises and capital inflows could lift THB, putting downward pressure on the pair.
