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USD/THB Eyeing 36.00 Test, Q1 GDP beat Aids Positive Cross Asset Signals

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USD/THB was last in the 36.05/10 region, close to May lows. We are up around 0.35% so far in the session on THB terms. Part of this is carry over from weaker USD trends post the onshore close on Friday. Still a firmer USD/Asia backdrop elsewhere is not seeing much spill over to the USD/THB at this stage.

  • THB is the best performing EM Asia FX currency in May to date, up nearly 2.7%, with MYR the next best at +1.85%. A break sub 36.00 could see the 200-day MA targeted at 35.82.
  • This morning's Q1 GDP beat is a positive, with growth up 1.1% q/q, versus 0.6% forecast. Y/Y growth was at 1.5%, versus 0.8% forecast but slightly slower than the Q4 pace.
  • Growth reflected a resilient consumption backdrop, with drags from government spending and investment. Given scope for government spending to improve, couple with the digital wallet rollout, this result may temper pessimism around the domestic growth backdrop, which could alleviate some pressure on BoT.
  • The baht has benefited from some downward momentum in US-TH yield spreads, although this has been more driven by the US leg.
  • Negative seasonality around dividend outflows may also be dissipating, while gold prices continue to track higher.
  • Local equity sentiment has been better, while the pace of equity outflows has cooled in May.
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USD/THB was last in the 36.05/10 region, close to May lows. We are up around 0.35% so far in the session on THB terms. Part of this is carry over from weaker USD trends post the onshore close on Friday. Still a firmer USD/Asia backdrop elsewhere is not seeing much spill over to the USD/THB at this stage.

  • THB is the best performing EM Asia FX currency in May to date, up nearly 2.7%, with MYR the next best at +1.85%. A break sub 36.00 could see the 200-day MA targeted at 35.82.
  • This morning's Q1 GDP beat is a positive, with growth up 1.1% q/q, versus 0.6% forecast. Y/Y growth was at 1.5%, versus 0.8% forecast but slightly slower than the Q4 pace.
  • Growth reflected a resilient consumption backdrop, with drags from government spending and investment. Given scope for government spending to improve, couple with the digital wallet rollout, this result may temper pessimism around the domestic growth backdrop, which could alleviate some pressure on BoT.
  • The baht has benefited from some downward momentum in US-TH yield spreads, although this has been more driven by the US leg.
  • Negative seasonality around dividend outflows may also be dissipating, while gold prices continue to track higher.
  • Local equity sentiment has been better, while the pace of equity outflows has cooled in May.