Recent forecasts for the USD to THB exchange rate indicate a bearish outlook for the US dollar, primarily due to growing expectations for aggressive interest rate cuts by the Federal Reserve in 2026. Analysts report that the dollar has weakened following a soft consumer price index, which showed a decrease in US inflation from 3% to 2.7%. This drop has reinforced market sentiment that the Federal Reserve may begin a cycle of rate cuts sooner than previously anticipated.
As of now, the USD is trading at 90-day lows near 31.38 THB, which is approximately 2.7% below its three-month average of 32.24 THB. The exchange rate has remained relatively stable within a 4.7% range, trading between 31.38 and 32.85 THB. Analysts highlight that investor sentiment around risk assets and improving fundamentals in other major currencies like the euro and the pound contribute to the pressure on the dollar.
On the side of the Thai baht, recent moves by the Bank of Thailand aim to curb the currency's appreciation. The central bank is implementing measures to manage a strong baht, including changes to regulations surrounding foreign income repatriation. Furthermore, Thailand's negative inflation—recorded at -0.49% for November—compounded with projected economic growth of just 2% for 2025, suggests ongoing challenges for the Thai economy related to strong currency impacts on exports and tourism.
Expectations for a potential 25 basis point interest rate cut in Thailand could provide stimulus but may also create downward pressure on the THB, especially if combined with the anticipated easing from the Fed. The broader context includes fluctuations in oil prices, which are currently down about 6.5% from their three-month average and trading in a volatile range. This dynamic can also influence the THB, given Thailand's dependency on energy imports.
Overall, market analysts forecast that if the Fed signals a clearer path toward rate cuts, alongside ongoing measures by the Bank of Thailand to address the strong baht, the USD/THB exchange rate may continue to face downward pressure in the medium term. It will be crucial to watch upcoming economic data from both the US and Thailand to gauge further currency movements.
