Thai Baht: BoT in focus amid double-top risk against US Dollar – OCBC

The Thai Baht (THB) has weakened to a three-month low against the Dollar. OCBC’s Sim Moh Siong and Christopher Wong attribute the pressure to higher Oil prices, weaker Gold and a stronger USD. Their near-term outlook remains slightly cautious, with Wednesday’s Bank of Thailand (BoT) meeting and moves in Gold and Oil the key factors to watch. The technical picture points to a potential double-top near recent highs, alongside nearby support levels.

BoT Meeting: Near-Term Caution on THB

"THB remained under pressure, having weakened to a three-month low amid higher oil prices, weakness in gold and a firmer USD."

"That said, THB decline came despite foreign purchases of Thai equities and bonds, suggesting that portfolio flows have not been the main source of currency weakness."

"Meanwhile, recent comments from BoT Deputy Governor Piti indicated that the central bank sees room to maintain its accommodative policy stance despite higher energy prices, given manageable inflation pressures and still-uneven domestic growth."

"We maintain a slight cautious near-term view on THB. Higher oil prices remain a concern for Thailand’s external balances, while further weakness in gold could add to currency volatility."

"Daily momentum is flat while RSI rose. Near-term consolidation around recent highs likely."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)