USD/THB: Overbought but still upside risks – OCBC

OCBC strategists Sim Moh Siong and Christopher Wong note USD/THB has risen over 4% month‑to‑date as markets scaled back expectations for near‑term Fed easing and Oil prices surged, hurting Thailand’s terms of trade. They see the Thai Baht (THB) among the region’s most vulnerable to energy and risk sentiment swings, with USD/THB momentum still bullish despite overbought signals and nearby support at 32.10 and 31.90.

Energy shock weighs on Thai Baht

"USDTHB traded with a firmer bias, tracking the broader rebound in the USD and softer regional risk sentiment."

"In the current environment of softer gold prices alongside oil-driven terms-of-trade shock, firmer USD should tilt near-term risks toward a softer THB."

"This is also in line with our earlier view that THB is likely to be amongst the regional FX worst hit due to sensitivity to shifts in oil prices, global risk sentiment and broad USD direction."

"Overnight development with Strait of Hormuz should provide temporary relief for THB but clearer visibility on the trajectory of energy prices and geopolitical developments is needed for USDTHB to turned lower meaningfully."

"Support at 32.10 levels (200 DMA, 61.8% fibo retracement of Oct high to Feb low), 31.90 (50% fibo)."

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