The USD to THB exchange rate has a bearish bias influenced by recent economic indicators. The US dollar has weakened due to a surprise drop in inflation, which has led to speculation about further interest rate cuts by the Federal Reserve.
Key drivers include the interest rate differential, with expectations of three rate cuts by mid-2026 reducing the USD's attractiveness. The Thai baht is expected to gain strength, supported by capital inflows and a projected current account surplus. Additionally, improving global economic growth could bolster demand for the baht, even though challenges like export slowdowns remain.
Over the next 1–3 months, the USD/THB rate is expected to trade in a stable range. An upside risk for the USD could arise from unexpected improvements in US economic sentiment, while a downside risk may materialize if the Thai economy shows stronger-than-anticipated resilience, influencing capital flows into the baht.