Thai baht to remain on weakening trend, USD/THB likely to trade at 36.70 by end-2016

Last year, the Thai baht was the third worst performing currency in Asia. It depreciated almost 9 percent against the US dollar and was behind only the Indonesian rupiah (-10 percent) and Malaysian ringgit (-19 percent).

The Thai baht is being dragged down due to decelerating growth momentum, stronger USD backdrop, continuous political uncertainty and the Bank of Thailand’s preference for a weaker currency.

The Thai authorities have pushed back the timetable for a return to civilian rule to the second half of 2017 from February 2016 originally. The above mentioned factors are expected to remain and continue to be a drag on the Thai baht.

“We forecast USD/THB at 36.70 by end-2016 on the assumption of a continued strong USD”, added Commerzbank.