Economy Siam Commercial Bank Predicts Limited Baht Strengthening Amid Volatile Market

[snoop1130]

Picture courtesy of Bangkok Post

 

Siam Commercial Bank (SCB), the fourth-largest lender in Thailand by total assets, is forecasting a moderate strengthening of the baht against the US dollar during the latter half of the year. However, this upward movement is expected to be constrained due to Thailand's slower GDP growth in 2025.

 

SCB anticipates the baht's value to fluctuate between 31.50 and 32.50 against the dollar by year-end. This forecast is largely influenced by external factors, particularly the weakening of the US dollar. According to Wachirawat Banchuen, senior financial markets strategist at SCB, this depreciation in the dollar is fuelled by growing uncertainty around US tariff policies.

 

Mr Wachirawat highlights a trend of global investors diversifying away from US assets, which has led to capital outflows from the US and put downward pressure on the dollar. These capital flows are increasingly directed towards European, Asian, and emerging markets. Despite these conditions, Mr Wachirawat notes that Thailand's capital and money markets may see less benefit from these inflows compared to regional peers, primarily due to the country's tepid growth outlook.

 

As a result, the baht's potential appreciation in the second half is likely to be limited. This year, the baht has gained 4.8% against the dollar, trailing behind currencies like the South Korean won and Taiwan dollar. The baht's volatility is also notable, ranking third in the region with a fluctuation rate of 10.1%, following the yen (13%) and the won (13%).

 

Patrick Poulier, SCB's first executive vice-president and head of financial markets, commented on the baht’s increased volatility, with fluctuations now ranging from 2-5 baht per year against the US dollar, compared to a previous range of 1-2 baht.

 

The volatility has led SCB to advise businesses—especially importers and exporters with significant foreign currency exposure—to consider foreign exchange hedging as a protective measure against exchange rate risks. Mr Poulier recommends that businesses hedge around 30-50% of their total foreign exchange exposure to mitigate risks effectively. While the average hedging proportion among SCB's business clients is about 50%, some businesses remain below this threshold and are thus more vulnerable.

 

SCB has observed a rise in interest among its clients in managing foreign exchange risks, with hedging-related activities increasing annually by 5-10% over recent years. To meet this growing demand, SCB has expanded its foreign exchange risk management services, offering a range of solutions through digital platforms for both individual and corporate clients.

 

  Adapted by ASEAN Now from Bangkok Post 2025-06-12

 

 

[mikeymike100]

The Baht strengthening, that's gonna upset TAT, they want more tourists? 

[hotchilli]

They don't know what's happening tomorrow, let alone later this year

[goatfarmer]

It's pretty close to its previous low of 32.1, September 2024. It might briefly touch 32, but my guess is that it's currently bottoming and by the end of the year it will be back to the 34 level. But who knows? Que sera sera. 😁

[spidermike007]

Asia becomes more influential as the US relevance declines worldwide. Asia is progressively moving away from the U.S. dollar, as a mix of geopolitical uncertainties, monetary shifts and currency hedging prompt de-dollarization across the region.

 

Recently, the Association of Southeast Asian Nations, or ASEAN, committed to boosting the use of local currencies in trade and investment as part of its newly released Economic Community Strategic Plan for 2026 to 2030. The plan outlined efforts to reduce shocks associated with exchange rate fluctuations by promoting local currency settlements and strengthening regional payment connectivity.

 

“Trump’s erratic trade policy decisions and the dollar’s sharp depreciation are probably encouraging a more rapid shift towards other currencies,” said Francesco Pesole, FX strategist at ING.

 

While de-dollarization is not exactly a new phenomenon, the narrative has changed. Investors and officials are beginning to recognize that the dollar can and has been used as a leverage — if not overtly weaponized — in trade negotiations. This has led to a reevaluation of predominantly overweight U.S. dollar portfolios, said Mitul Kotecha, Barclays’ head of FX and EM macro strategy in Asia. "Countries are looking at the fact that the dollar has been, and can be used as a sort of weapon on trade, direct sanctions, etc… That’s been the real change, I think, in the last several months,” he told CNBC.

 

Beyond ASEAN, the BRICS nations, which include India and China, have also actively developed and peddled their own payment system to bypass traditional systems like SWIFT and reduce dependency on the dollar. China has also been promoting bilateral trade settlements in the yuan.

 

Just one of the reasons for the strength of the Thai baht?

 

[SanSaiExPat]

3 minutes ago, spidermike007 said:

Asia becomes more influential as the US relevance declines worldwide. Asia is progressively moving away from the U.S. dollar, as a mix of geopolitical uncertainties, monetary shifts and currency hedging prompt de-dollarization across the region.

 

Recently, the Association of Southeast Asian Nations, or ASEAN, committed to boosting the use of local currencies in trade and investment as part of its newly released Economic Community Strategic Plan for 2026 to 2030. The plan outlined efforts to reduce shocks associated with exchange rate fluctuations by promoting local currency settlements and strengthening regional payment connectivity.

 

“Trump’s erratic trade policy decisions and the dollar’s sharp depreciation are probably encouraging a more rapid shift towards other currencies,” said Francesco Pesole, FX strategist at ING.

 

While de-dollarization is not exactly a new phenomenon, the narrative has changed. Investors and officials are beginning to recognize that the dollar can and has been used as a leverage — if not overtly weaponized — in trade negotiations. This has led to a reevaluation of predominantly overweight U.S. dollar portfolios, said Mitul Kotecha, Barclays’ head of FX and EM macro strategy in Asia. "Countries are looking at the fact that the dollar has been, and can be used as a sort of weapon on trade, direct sanctions, etc… That’s been the real change, I think, in the last several months,” he told CNBC.

 

Beyond ASEAN, the BRICS nations, which include India and China, have also actively developed and peddled their own payment system to bypass traditional systems like SWIFT and reduce dependency on the dollar. China has also been promoting bilateral trade settlements in the yuan.

 

Just one of the reasons for the strength of the Thai baht?

 

I think time will tell, you grossly mischaracterize and underestimate President Trumps international trade policies.   

• • Job Creation and Wage Growth: Since January 2025, Trump’s administration has overseen the addition of 345,000 jobs, with 188,000 (54%) in the private sector, including 139,000 in May 2025, exceeding expectations, per White House data. Real average hourly earnings rose 0.4% for middle/low-income workers and 1% for manufacturing since January, with a 4% annual increase outpacing inflation (2.4% in November 2024), per economic updates. This has particularly benefited non-high school graduates, with labor force participation up 0.7%, reflecting support for less-skilled workers, a key campaign promise.
  • Investment and Production: Industrial production reached its seventh-highest monthly level in March 2025, with $5 trillion in new investment announced, per White House reports. Mortgage rates fell 0.4%, saving $1,080/year on a median home, and auto sales saw the biggest monthly jump in March, signaling consumer confidence boosts, per trade analyses.
  • Energy Independence: Continued deregulation of energy sectors, building on his first term’s policies, has kept gasoline prices down 7% since January 2025 and egg prices down 50%, per White House claims, aligning with his goal to lower living costs.
• Inflation and CPI Management:
  • Price Stability: The May 2025 CPI rose 2.3% year-over-year, the slowest since February 2021, with core CPI at 2.8% below the 2.9% forecast, per economic data. This suggests early success in curbing inflation despite tariff introductions, challenging predictions of a spike (e.g., 2.4–2.8% summer uptick), per analysts. Trump’s team credits policy shifts, though some attribute it to Biden-era momentum.
• Trade and Negotiation Wins:
  • Bilateral Deals: Early in his second term, Trump secured a zero-for-zero auto parts deal with India (May 6, 2025) and Colombia’s agreement to deport illegal immigrants in exchange for tariff relief (April 2, 2025), per trade updates. These demonstrate his leverage-based diplomacy, boosting U.S. manufacturing and border security, key campaign goals.
  • Fentanyl Crackdown: Tariffs targeting China (34%, April 2025) aim to curb fentanyl trafficking, with initial reports of reduced precursor shipments, per White House statements. This aligns with his public health focus, though long-term impact is pending.
• Deregulation and Business Climate:
  • Regulatory Relief: Trump’s rollback of 15,000 federal jobs and deregulation efforts (e.g., environmental rules) have spurred business optimism, with the National Federation of Independent Businesses reporting a 5-point confidence increase in Q2 2025, per trade analyses. This supports small businesses, a constituency he champions.
  • Tax Policy: Proposals to extend 2017 tax cuts and introduce new incentives (e.g., manufacturing credits) are in progress, with early market responses (e.g., Dow up 1.2% in May) suggesting investor support, per Kiplinger (June 2025).

[Aussie999]

34 minutes ago, SanSaiExPat said:

I think time will tell, you grossly mischaracterize and underestimate President Trumps international trade policies.   

• • Job Creation and Wage Growth: Since January 2025, Trump’s administration has overseen the addition of 345,000 jobs, with 188,000 (54%) in the private sector, including 139,000 in May 2025, exceeding expectations, per White House data. Real average hourly earnings rose 0.4% for middle/low-income workers and 1% for manufacturing since January, with a 4% annual increase outpacing inflation (2.4% in November 2024), per economic updates. This has particularly benefited non-high school graduates, with labor force participation up 0.7%, reflecting support for less-skilled workers, a key campaign promise.
  • Investment and Production: Industrial production reached its seventh-highest monthly level in March 2025, with $5 trillion in new investment announced, per White House reports. Mortgage rates fell 0.4%, saving $1,080/year on a median home, and auto sales saw the biggest monthly jump in March, signaling consumer confidence boosts, per trade analyses.
  • Energy Independence: Continued deregulation of energy sectors, building on his first term’s policies, has kept gasoline prices down 7% since January 2025 and egg prices down 50%, per White House claims, aligning with his goal to lower living costs.
• Inflation and CPI Management:
  • Price Stability: The May 2025 CPI rose 2.3% year-over-year, the slowest since February 2021, with core CPI at 2.8% below the 2.9% forecast, per economic data. This suggests early success in curbing inflation despite tariff introductions, challenging predictions of a spike (e.g., 2.4–2.8% summer uptick), per analysts. Trump’s team credits policy shifts, though some attribute it to Biden-era momentum.
• Trade and Negotiation Wins:
  • Bilateral Deals: Early in his second term, Trump secured a zero-for-zero auto parts deal with India (May 6, 2025) and Colombia’s agreement to deport illegal immigrants in exchange for tariff relief (April 2, 2025), per trade updates. These demonstrate his leverage-based diplomacy, boosting U.S. manufacturing and border security, key campaign goals.
  • Fentanyl Crackdown: Tariffs targeting China (34%, April 2025) aim to curb fentanyl trafficking, with initial reports of reduced precursor shipments, per White House statements. This aligns with his public health focus, though long-term impact is pending.
• Deregulation and Business Climate:
  • Regulatory Relief: Trump’s rollback of 15,000 federal jobs and deregulation efforts (e.g., environmental rules) have spurred business optimism, with the National Federation of Independent Businesses reporting a 5-point confidence increase in Q2 2025, per trade analyses. This supports small businesses, a constituency he champions.
  • Tax Policy: Proposals to extend 2017 tax cuts and introduce new incentives (e.g., manufacturing credits) are in progress, with early market responses (e.g., Dow up 1.2% in May) suggesting investor support, per Kiplinger (June 2025).

Seems you believe Taco's propaganda 

[jwl53]

18 hours ago, snoop1130 said:

Bangkok Post

 

Siam Commercial Bank (SCB), the fourth-largest lender in Thailand by total assets, is forecasting a moderate strengthening of the baht against the US dollar during the latter half of the year.

Another nail in the tourism coffin

[Aussie999]

Thailand, like lemmings, just can't stop their own demise. The rich are laughing, while the majority are suffering, but Thais are raised to obey and not question.

[Colki]

Maybe the  rest of the world should be charging the US of A with currency manipulation.

[Nicco]

Perfect for tourism and hopeful foreign condo sales. Tax expat farang and tax the money they need to pay the tax 😂Amazing export strategy especially when US tarrifs added.

 

Go team Thailand!!

[soalbundy]

8 minutes ago, Aussie999 said:

Thailand, like lemmings, just can't stop their own demise. The rich are laughing, while the majority are suffering, but Thais are raised to obey and not question.

The people in the West are experiencing the same thing and have been for years, the deterioration in living standards in falang land have been gradual but persistent, in Thailand it hasn't been so well orchestrated because it's beyond the governments control due to external events.

[ronnie50]

2 hours ago, hotchilli said:

They don't know what's happening tomorrow, let alone later this year

Right. I also wonder what was the motivation of SCB's senior officer to make this statement. On the surface it looks like he's just trying to drum up business in SCB's hedging advice department. But predicting the baht will strengthen later this year follows rather closely to the government's encouragement to get Thais with money overseas to repatriate those funds. In other words, 'bring that money back soon or it will cost you more'. Quid pro quo? Also, the baht is already over-valued many (most) would agree, and while the US dollar may well continue to depreciate, as the article predicts, that would only partially justify the possibility of a stronger baht.

[helloagain]

2 hours ago, mikeymike100 said:

The Baht strengthening, that's gonna upset TAT, they want more tourists? 

So less money will come here then so I only bring what I need. And I still have my house money to come here at some time, o will keep it where it is earning GOOD interest not the paltry 1% or just above banks give here minus 15% tax.

[Jedi888]

US's trade deal with Th is NOT done. Once there is a deal, or no good deal by the end of the 90 day pause, the real recoil jerk effect will happen. We are now in a dead cat bounce on this FX rate. Trade is not locked in, tourism is trending down.... Thais are in debt more than before, just saw a whole documentary on YT about that topic for 45 min... its a real thing.. Tell me exactly how Thailands econ is so strong that it warrants cap inflows and "strong economy kaaaa" that the baht is worthy to rise more? Again, it's called a dead cat bounce on a bar chart.  Current position is at a 4th time bottom resistance point. Unless it really is lot's of dumb money buying Baht... and dumb money is just that, dumb. 

[peter48]

One thing's for sure the damage Trump  is doing to the world is massive. Globalisation raised all boats particularly for countries like Thailand  with cheaper popular exports to USA and China. Thats falling now although I think its being hidden a bit. . Thailand is going to get poorer like most developing countries as World bank are predicting. When trade is reduced and exports prices rise ppl suffer. That's started. And 9 yrs ago the Brexit idiocy hit UK and now they are poorer as their trade, exports, inward investment, and growth has sunk. As always the very rich suffer far less than the average family who have less assets. It's happening already. 

 

[madmitch]

They only ever state how the THB is faring against the USD, a currency that is less relevant now than it's been in years.

 

What's the forecast against the Euro, CNY and other major world currencies?

[davb]

1 hour ago, soalbundy said:

The people in the West are experiencing the same thing and have been for years, the deterioration in living standards in falang land have been gradual but persistent, in Thailand it hasn't been so well orchestrated because it's beyond the governments control due to external events.

In Thailand the government doesn't have the iron hand over things like food vending stalls like in the US, so Thais can still experience communal life at an acceptable cost. When I talk to my wife's son in the US it's excruciating. They are practically trapped in their homes because all the options are very corporate and very expensive.


 

[Sydebolle]

I just love the article rooted on a prediction of Siam Commercial Bank while publishing a picture of "Superrich". 

Is this the proverbial crystal ball owned and operated by the SCB leadership now? 

[harryviking]

The Dollar is falling. The result is logic.....other currencies become stronger against Dollar. Nothing to see here..... 🙄🙄 

[Mavideol]

3 hours ago, SanSaiExPat said:

I think time will tell, you grossly mischaracterize and underestimate President Trumps international trade policies.   

• • Job Creation and Wage Growth: Since January 2025, Trump’s administration has overseen the addition of 345,000 jobs, with 188,000 (54%) in the private sector, including 139,000 in May 2025, exceeding expectations, per White House data. Real average hourly earnings rose 0.4% for middle/low-income workers and 1% for manufacturing since January, with a 4% annual increase outpacing inflation (2.4% in November 2024), per economic updates. This has particularly benefited non-high school graduates, with labor force participation up 0.7%, reflecting support for less-skilled workers, a key campaign promise.
  • Investment and Production: Industrial production reached its seventh-highest monthly level in March 2025, with $5 trillion in new investment announced, per White House reports. Mortgage rates fell 0.4%, saving $1,080/year on a median home, and auto sales saw the biggest monthly jump in March, signaling consumer confidence boosts, per trade analyses.
  • Energy Independence: Continued deregulation of energy sectors, building on his first term’s policies, has kept gasoline prices down 7% since January 2025 and egg prices down 50%, per White House claims, aligning with his goal to lower living costs.
• Inflation and CPI Management:
  • Price Stability: The May 2025 CPI rose 2.3% year-over-year, the slowest since February 2021, with core CPI at 2.8% below the 2.9% forecast, per economic data. This suggests early success in curbing inflation despite tariff introductions, challenging predictions of a spike (e.g., 2.4–2.8% summer uptick), per analysts. Trump’s team credits policy shifts, though some attribute it to Biden-era momentum.
• Trade and Negotiation Wins:
  • Bilateral Deals: Early in his second term, Trump secured a zero-for-zero auto parts deal with India (May 6, 2025) and Colombia’s agreement to deport illegal immigrants in exchange for tariff relief (April 2, 2025), per trade updates. These demonstrate his leverage-based diplomacy, boosting U.S. manufacturing and border security, key campaign goals.
  • Fentanyl Crackdown: Tariffs targeting China (34%, April 2025) aim to curb fentanyl trafficking, with initial reports of reduced precursor shipments, per White House statements. This aligns with his public health focus, though long-term impact is pending.
• Deregulation and Business Climate:
  • Regulatory Relief: Trump’s rollback of 15,000 federal jobs and deregulation efforts (e.g., environmental rules) have spurred business optimism, with the National Federation of Independent Businesses reporting a 5-point confidence increase in Q2 2025, per trade analyses. This supports small businesses, a constituency he champions.
  • Tax Policy: Proposals to extend 2017 tax cuts and introduce new incentives (e.g., manufacturing credits) are in progress, with early market responses (e.g., Dow up 1.2% in May) suggesting investor support, per Kiplinger (June 2025).

sure sure so sure that the polls are agreeing (not), the USA economy is down hill thanks to the orange guy

Trump job approval at 38 percent in new survey

https://au.news.yahoo.com/cnn-data-chief-stunned-definitely-124324030.html

 

 

 

[wwest5829]

I had posted this morn on my FB page. … Not important to anyone not on retirement income outside the USA, in lower cost countries, and the percent difference will depend on the particular country exchange rate but ... I just looked at the comparison with the US dollar exchange rate from a year ago. Here in Thailand from this time last year, the USD has lost 13% of its exchange value. Being on a fixed sustainable  retirement income, you can believe this is felt negatively. And I am considerably better off than many working middle class retirees due to living in a lower cost country. Once again, thanks to the economic instability caused by trump. Additionally, recently check on my retirement funds invested in USA are down about one year’s total income (close to $30K).

[norsurin]

Predict whatever they want.Im sure it will raise alot.

[norsurin]

1 hour ago, helloagain said:

So less money will come here then so I only bring what I need. And I still have my house money to come here at some time, o will keep it where it is earning GOOD interest not the paltry 1% or just above banks give here minus 15% tax.

They just double the prices if less tourists.Typical thai thinking.

[terryofcrete]

If you love visiting Thailand you tend to ignore the negative stuff that you encounter and forgive the ever decreasing sense of being welcome and feeling safe from exploitation but in recent visits I am gradually leaning towards finding new counties to visit and dropping Thailand from my list.... sadly. 
The whole package of Thailand's welcome, costs, service, and amenities is deteriorating and now feels like a rip off .. 
even the ladies are getting fatter ! 

[Hardcastle P]

23 hours ago, snoop1130 said:

Picture courtesy of Bangkok Post

 

Siam Commercial Bank (SCB), the fourth-largest lender in Thailand by total assets, is forecasting a moderate strengthening of the baht against the US dollar during the latter half of the year. However, this upward movement is expected to be constrained due to Thailand's slower GDP growth in 2025.

 

SCB anticipates the baht's value to fluctuate between 31.50 and 32.50 against the dollar by year-end. This forecast is largely influenced by external factors, particularly the weakening of the US dollar. According to Wachirawat Banchuen, senior financial markets strategist at SCB, this depreciation in the dollar is fuelled by growing uncertainty around US tariff policies.

 

Mr Wachirawat highlights a trend of global investors diversifying away from US assets, which has led to capital outflows from the US and put downward pressure on the dollar. These capital flows are increasingly directed towards European, Asian, and emerging markets. Despite these conditions, Mr Wachirawat notes that Thailand's capital and money markets may see less benefit from these inflows compared to regional peers, primarily due to the country's tepid growth outlook.

 

As a result, the baht's potential appreciation in the second half is likely to be limited. This year, the baht has gained 4.8% against the dollar, trailing behind currencies like the South Korean won and Taiwan dollar. The baht's volatility is also notable, ranking third in the region with a fluctuation rate of 10.1%, following the yen (13%) and the won (13%).

 

Patrick Poulier, SCB's first executive vice-president and head of financial markets, commented on the baht’s increased volatility, with fluctuations now ranging from 2-5 baht per year against the US dollar, compared to a previous range of 1-2 baht.

 

The volatility has led SCB to advise businesses—especially importers and exporters with significant foreign currency exposure—to consider foreign exchange hedging as a protective measure against exchange rate risks. Mr Poulier recommends that businesses hedge around 30-50% of their total foreign exchange exposure to mitigate risks effectively. While the average hedging proportion among SCB's business clients is about 50%, some businesses remain below this threshold and are thus more vulnerable.

 

SCB has observed a rise in interest among its clients in managing foreign exchange risks, with hedging-related activities increasing annually by 5-10% over recent years. To meet this growing demand, SCB has expanded its foreign exchange risk management services, offering a range of solutions through digital platforms for both individual and corporate clients.

 

  Adapted by ASEAN Now from Bangkok Post 2025-06-12

 

 

True but its the dollar weakening not the Thi bht getting stronger 

[Aussie999]

5 hours ago, soalbundy said:

The people in the West are experiencing the same thing and have been for years, the deterioration in living standards in falang land have been gradual but persistent, in Thailand it hasn't been so well orchestrated because it's beyond the governments control due to external events.

This is about Thailand, no other country, keep it relevant.

[Reddavy]

6 hours ago, goatfarmer said:

It's pretty close to its previous low of 32.1, September 2024. It might briefly touch 32, but my guess is that it's currently bottoming and by the end of the year it will be back to the 34 level. But who knows? Que sera sera. 😁

32 what?????

[goldenbrwn1]

The dollar is weakening against all currencies, it’s not anything Baht specific or Thailand being special . It’s all part of the debt cycle , interest rates cuts are looming for the US who are as per usual with Powell behind the curve.  The markets are ahead of the news and moving out of dollars . Nothing to see here imo

[soalbundy]

9 minutes ago, Aussie999 said:

This is about Thailand, no other country, keep it relevant.

In my defense....Thailand was mentioned. Next time I'll send you a copy and you can redraft it for me, don't want to increase your irritability.