MUFG: Low Yields Weigh on Thai Baht Despite Lower Oil
MUFG analyst Lloyd Chan says the Thai Baht's underperformance stems from its low-yield status and the Bank of Thailand's growth-friendly policy that limits rate hikes, offsetting the benefit of cheaper oil.
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Lloyd Chan at MUFG attributes the Thai Baht's (THB) recent weakness to its low-yield profile, even as lower crude oil prices typically provide support. The Bank of Thailand's (BoT) growth-oriented monetary stance constrains tightening, leaving THB exposed.
Chan notes that the yield differential works against the baht, making it less attractive for carry trades. Unless the BoT shifts toward a more hawkish outlook, THB is likely to remain under pressure against major currencies.
Source: FXStreet Forex News