Pound Sterling - Thai Baht Forecasting
When determining the best time to make a foreign exchange transaction, in this case the GBP vs THB, you should pay attention to the recent market trends for both currencies.
Pound Sterling (GBP)
In the 2nd half of August market analysts started forecasting risk to the downside for the pound from US 1.33 given the tight 7 week deadline for Brexit combined with the drop in domestic demand due to the pandemic.
US dollar weakness has helped the embattled pound continue its recovery off June and early July lows. Despite this brief upturn, the outlook remains pessimistic as Brexit uncertainty and questions over the economy’s ability to rebound after the pandemic weigh on the currency.
In late July pound sterling is heading back towards US1.30 due to US dollar weakness. This is a remarkable change of fortunes for GBP which was sold-off after the Brexit vote and again after the virus forced a lockdown in London, the world’s largest foreign-exchange centre. Against the dollar, sterling touched the lowest level in 35 years (below US1.16) in March as traders sought the safety of the USD.
The coronavirus pandemic has replaced Brexit in the headlines and means that the deadline for a trade deal with the Eurozone this year could either be pushed back, delaying a risk for the currency, or see more favorable terms given to the U.K.
Read more in the article GBP Forecasts.
Thai Baht (THB)
The Thai Baht has risen 4% so far this year against the US dollar due to greenback weakness, this won't help with the hoped for tourism lead recovery of the Thai economy post virus.
NAB told Bloomberg TV that it sees a recovery in Asian currencies in the 2nd half of 2020 if the coronavirus comes under control.
In 2018 tourism contributed around 20 percent of Thailand's total GDP, so the dramatic impact to tourism from the coronavirus pandemic is expected to plunge Thailand into a recession.
Recent years have been extremely kind to the baht and 2019 has been no exception. The Thai baht has been the best performing currency in Asia for 2019, the baht rose to a 6-year high against the US dollar (฿30.66) and to a 10-year high against the Australian dollar (฿21.35), as well as to long-term highs against a host of other major currencies.
The baht has previously being supported by Thailand’s large current-account surplus and has benefited from speculation that Thai stocks will soon be assigned a larger weighting in the MSCI Emerging Markets index, which would result in significant amounts of foreign capital entering Thailand.