USD/THB continues losing ground on soft USD data

• The USD/THB declined to 36.20 on Thursday with sharp losses seen during the European session.
• Signs of US economic slowdown are unveiled, as Initial Jobless Claims surpassed expectations and the Philadelphia Fed Manufacturing Survey came in soft.
• Given the soft US economic data, the likelihood of the Fed cutting sooner rather than later has increased.

The USD/THB pair is trading weaker on Thursday with 0.35% losses at around 36.20. Soft Initial Jobless Claims and a reduction in the Philadelphia Fed Manufacturing Survey following the lower-than-expected Consumer Price Index (CPI) seem to be driving the USD downwards on rising dovish bets on the Federal Reserve (Fed).

The Initial Jobless Claims for the week ending May 3, touched a high of 222K, outdoing forecasts and marking an upward revision of the previous week's figures which stood at 232K. Continued economic softness may mount pressure on the Federal Reserve (Fed), to cut rates earlier. However, markets continue to see the easing starting in September but if data continues to outperform, the Fed might consider a cut in July.

USD/THB technical analysis

On the daily chart, the Relative Strength Index (RSI) shows a decrease from positive territory to negative in the last session, now nearing oversold conditions. This indicates that sellers currently dominate the market. Concurrently, the Moving Average Convergence Divergence (MACD) histogram details rising red bars, indicative of increasing negative momentum.

The USD/THB pair's position in relation to its Simple Moving Averages (SMAs), shows it positioned below the 20-day but above the 100 and 200-day averages. This suggests that while the short-term outlook is negative, the medium to longer outlook remains positive, as long as buyers defend these levels.

USD/THB daily chart