USD/THB Outlook:
The USD/THB is slightly positive and likely to move sideways. The rate is just below its recent average and remains within a stable range, lacking a clear driver to push it significantly in either direction.
Key drivers:
• Rate gap: The Federal Reserve's interest hikes have boosted the USD, while the Bank of Thailand's tightening measures aim to control the baht’s rapid appreciation.
• Risk/commodities: Oil prices are at recent highs, which traditionally support USD due to its status as a commodity currency, but this trend also pressures the baht.
• Economic restructuring: Thailand's Finance Ministry is concerned about the strong baht's impact on exports, which may lead to policies favoring a controlled depreciation.
Range:
The USD/THB is likely to drift within its recent 3-month range of 30.81 to 32.03.
What could change it:
• Upside risk: A further increase in geopolitical tensions could drive safe-haven demand for the USD.
• Downside risk: A significant drop in US economic data could weaken the USD and push the rate lower.