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- USD/THB to edge higher toward 38.00 by Q4 – MUFG
USD/THB to edge higher toward 38.00 by Q4 – MUFG
In July, the Thai baht weakened against the US dollar in terms of London closing rates from 35.341 to 36.364. Despite potential positives in domestic fundamentals, the THB looks to be adversely affected by global risks, in the view of economists at MUFG Bank.
Domestic growth may face downside risks
“We revise our USD/THB higher, to 37.50 in Q3 and 38.00 in Q4. This is on the back of market concerns about global growth weighing on the positioning of the THB. Domestic growth may face downside risks, against our forecast of 3.4% GDP growth in 2022. China’s challenging recovery and covid-zero strategy may also continue to weigh on Thailand’s tourism sector in 2022 and parts of 2023.”
“Despite our forecast of a 50 bps rate hike by the BOT this year, it may pale in comparison to other central banks’ moves.”
“We forecast some downsides in 2023 as the headwinds dissipate, down to 37.25 in Q1-2023 and 36.250 in Q2-2023.”
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