News & analysis

The Thai baht has been the second worst performing Asian currency since the start of 2024, having fallen almost 6% against the dollar. Only the Japanese yen has weakened by more. That said, we now think the worst is behind the baht. The external interest rate environment has started to turn more constructive, and domestic conditions should be less of a drag moving forwards. All told, while a renewed rally in US yields poses continued upside risks over a tactical horizon, we think the more constructive outlook should prevent the pair from returning to its year-to-date highs. Further out, we expect that as the Fed easing path becomes clearer there will be a sustained improvement in the rates backdrop, which combined with a pickup in seasonal factors and Chinese growth, should see USDTHB retrace lower over the medium term.

You can read our THB Update in full here:

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Author: 
Nick Rees, FX Market Analyst

 

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