USD/THB Holding Above 35.00, Volatility Expected To Stay High

USD/THB is holding above the 35.00 level, last in the 35.05/10 region. This is little changed for the session and in line with relatively steady trends in terms of the USD indices. The simple 100-day MA for USD/THB is close by at 35.03, while the 200-day is higher at 35.51. The pair remains above all key EMAs, with the 200-day coming in at 34.74.

• Thai officials have been across the wires today. The Finance Minister stating that inflation is expected to return to target this year and that the BoT must support the continued economic recovery. 4-5% growth is seen as appropriate, although note the current consensus sits at 3.7% for 2023.
• Electricity tariffs are also expected to come down, which should aid the headline inflation picture. At the margin, these developments will add to expectations of a potential BoT hold at the March 29th policy meeting.
• This could weigh on the THB given a more hawkish Fed backdrop, although the central bank stated yesterday it expects the baht to be highly volatile going forward. 1 month implied vol is just under 11%, not too off YTD highs.
• Today's Feb consumer confidence print rose to 52.6 from 51.7 in Jan. This is back to early 2020 levels.
• The tourism minister also stated arrivals of 25-30million were expected this year, which is in line with previous estimates.