Thai Baht: Consolidation expected in defined range against US Dollar – Commerzbank

Commerzbank FX Analyst Charlie Lay reports USD/THB has eased from around 33.90 in late July to about 32.70, helped by a softer Dollar. The Bank of Thailand sees recent baht volatility as driven by Middle East risks and Fed expectations, and Commerzbank looks for near-term consolidation in USD/THB around the 32.50–33.00 range.

Baht seen consolidating near term

"The Bank of Thailand (BoT) maintained the benchmark one-day repurchase rate unchanged at 1.00% as expected and for the third consecutive meeting. The Monetary Policy Committee (MPC) voted unanimously, 7-0 vote. BoT kept an accommodative bias and appears comfortable staying on hold for an extended period, possibly up to H1 2027. "

"We expect BoT to remain on hold for the rest of 2026, with the current policy setting providing sufficient support to growth while inflation expectations remain anchored. "

"The bias is arguably still toward accommodation rather than tightening, although BoT has emphasised that rate cuts are not warranted under current conditions and that monetary-policy transmission is becoming less effective."

"For USD/THB, the pair has moderated from around 33.90 in late July to about 32.70, aided by the softer USD. BoT noted that recent baht volatility has largely reflected Middle East developments and changing expectations for the Fed."

"Given the still-fragile domestic recovery, excessive THB appreciation would be undesirable, although the MPC gave no indication of a policy shift in response to the currency. We look for consolidation in USD/THB in the near term around 32.50-33.00."

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