Bias: The USD/THB is bearish-to-range-bound, currently below the 90-day average and within the lower half of the 3-month range.
Key drivers:
- Rate gap: The Bank of Thailand has recently cut interest rates to 1.25%, while the Federal Reserve is expected to lower rates next year, increasing USD vulnerability.
- Risk/commodities: Recent stability in oil prices, currently above average, may support the baht's value as Thailand is an oil-importing nation.
- Economic growth: Thailand's economy is projected to grow at just 1.6% in 2026, indicating ongoing challenges that may weigh on the baht.
Range: Given its current position, the USD/THB is likely to hold stable in the lower range of recent prices.
What could change it:
- Upside risk: A stronger-than-expected US labor report could boost the USD.
- Downside risk: Continued rate cuts from the Federal Reserve could further weaken the USD against the THB.