Thai Baht: Recent THB gains face headwinds – OCBC

OCBC’s Christopher Wong notes that recent Thai Baht (THB) strength may slow as external conditions turn less supportive. Governor Vitai’s comments suggest further rate cuts are unlikely without another shock, tempering easing expectations. However, higher US yields, weaker Gold and elevated Oil prices, alongside renewed US–Iran tensions, are seen as drags on THB, even as structural tech and Foreign Direct Investment (FDI) trends offer longer-term support.

External backdrop less supportive for Baht

"THB’s recent outperformance may face some consolidation as the external backdrop turns less supportive."

"However, Friday’s stronger US payrolls lifted UST yields and the USD while weighing on gold, removing some of the external and gold-related support for THB."

"Elevated oil prices are also an increasingly important drag, with renewed US-Iran tensions over the weekend adding to upside risks for energy prices."

"As a net energy importer, THB remains relatively exposed should oil stay elevated."

"USD/THB last closed at 32.94 levels. Mild bullish momentum on daily chart shows signs of fading while RSI fell."