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USD/THB breaks above 33.50 despite softer US inflation outlook
MUFG links the baht risk to Thailand’s low carry and worse terms of trade tied to higher oil prices.
FXStreet highlights a MUFG view that softer US inflation data has weakened the US dollar and pushed down expectations for Fed rate hikes, but USD/THB has still moved higher, breaking above 33.50.
MUFG points to Thailand factors that could weigh on the baht, including a low carry environment, deteriorating terms of trade associated with higher oil prices, and rising growth risks from Middle East tensions.
The note also cites valuation metrics suggesting the baht is only modestly overvalued, supporting a weaker baht outlook.
The broader setup comes as analysts monitor how changes in inflation expectations, oil prices, and regional risk could continue to influence the currency pair.