PATTAYA, Thailand – Financial Markets Group at Siam Commercial Bank (SCB FM) expects the Thai baht to remain in a relatively narrow trading range, with oil prices and developments in the conflict between the United States and Iran continuing to be the dominant factors influencing currency movements. According to SCB, the baht has traded between 32.10 and 32.80 against the US dollar over the past month, with investors closely monitoring geopolitical tensions and their impact on global energy markets. Patrick Poulier, Head of Financial Markets Function at SCB, said that rising oil prices triggered by military exchanges and delays in peace negotiations between the US and Iran have contributed to baht weakness. At the same time, demand for safe-haven assets has kept the US dollar strong despite positive Thai economic indicators, including stronger-than-expected first-quarter GDP growth and export figures.
SCB forecasts that if negotiations between Washington and Tehran remain prolonged, the baht could continue trading within a range of 32.30 to 32.80 per dollar. However, if a clearer path toward a diplomatic agreement emerges, the Thai currency could gradually strengthen as demand for safe-haven assets declines. The bank noted that several factors may continue to weigh on the baht. Thailand’s imports are currently growing faster than exports, potentially widening the trade deficit. In addition, expectations that the US Federal Reserve will keep interest rates elevated for longer, together with continued investor demand for US technology assets, could provide further support for the US dollar.
On the other hand, SCB believes a reduction in geopolitical tensions could improve Thailand’s trade and current account balances through lower oil prices, while easing global inflation pressures may weaken the dollar and support emerging-market currencies, including the baht.
Despite the potential for appreciation, SCB does not expect the baht to return to the stronger levels of around 31.00-31.50 seen before the conflict. The bank argues that structural changes linked to the global artificial intelligence boom are strengthening the US economy and improving America’s long-term current account position, creating sustained support for the dollar. Meanwhile, Wachirawat Banchuen, Senior Financial Markets Strategist at SCB, said the bank expects the Bank of Thailand’s Monetary Policy Committee to keep interest rates unchanged throughout 2026.
He said policymakers are likely to look through inflationary pressures caused by supply-side shocks and focus instead on supporting economic activity, particularly as many Thai SMEs face worsening debt-servicing conditions due to the economic fallout from geopolitical tensions.
SCB also expects Thai government bond yields to decline over the medium term if global tensions ease and capital flows return to Thailand. The bank forecasts US Treasury yields could move lower as war-related uncertainty subsides, projecting a range of 4.20% to 4.50% over the next one to two months.
