OCBC strategists Sim Moh Siong and Christopher Wong note that USD/THB has risen more than 4% since the beginning of the month as markets lowered expectations for near-term monetary easing from the Fed and oil prices rose, hurting Thailand’s trading conditions. They see the Thai baht (THB) as one of the most vulnerable to swings in energy and risk sentiment in the region, with USD/THB momentum remaining bullish despite overbought signals and nearby support at 32.10 and 31.90.
The energy shock weighs on the Thai baht
“USDTHB traded more bullish on the broader dollar recovery and lower risk sentiment in the region.”
“In the current environment of lower gold prices and the oil shock, a stronger dollar should tilt near-term risks towards more benign human trafficking.”
“This is also consistent with our prior view that human trafficking is likely to be one of the hardest hit regional currencies due to sensitivity to oil price movements, global risk sentiment and the broad direction of the USD.”
“The overnight development of the Strait of Hormuz should provide temporary relief for human trafficking, but clearer visibility on the trajectory of energy prices and geopolitical developments is needed for USDTHB to decline significantly.”
“Support at levels 32.10 (200 DMA, 61.8% Fibo retracement from October high to February low), 31.90 (50% Fibo).”
(This article was created with the aid of an artificial intelligence tool and has been reviewed by an editor.)
