Tourism Outlook May Aid THB Relative Value Plays

USD/THB sits slightly above recent lows, the pair last at 34.68. Through December dips sub 34.60 have been supported. Like other pairs in the region today, the USD is seeing some support, amid higher yields and a firmer oil price backdrop.

• The baht is the third best performer for December, behind KRW and CNY, within the region. Optimism around a pick-up in China outbound travel is a clear positive for the local currency. The government's latest estimates of 25million arrivals for 2023 is critical for a further improvement in the growth backdrop.
• The finance minister stated as much yesterday, with the government targeting 3.8% growth this year. The consensus sits slightly lower at 3.7%.
• Thailand, along with China, are the two major EM Asia economies, where growth is projected to be stronger in 2023, versus 2022.
• This may aid performance for the baht on a relative value basis.
• For USD/THB, bulls may need a move back above 35.00, the 20-day EMA, to re-establish greater upside. A sustained break sub 34.60 remains the focus on the downside.