The USD/THB exchange rate has been in a strong downward trend this year despite the ongoing weakness in the Thai economy. The pair was trading at 22.37 on Monday, down by 13% from its highest level in 2024. This article explores some of the top reasons why the Thai baht is in a strong uptrend this year.

Reason why the Thai baht is soaring 

The first main reason why the USD/THB exchange rate is falling is that the US dollar has plunged this year. TradingView data shows that the US dollar index has plunged from the year-to-date high of $110 to $98 today.

The dollar has fallen because of the weak demand from central banks due to Donald Trump’s policies, recent Federal Reserve interest rate decision, and the overall demand for foreign currencies. It has fallen against most emerging market currencies, including the South African rand and the Singapore dollar.

The Thai baht has received a boost from the soaring gold price, which neared the important milestone at $4,000 today. Gold has jumped by over 50% from the lowest level this year. Thai benefits from soaring gold prices because it is one of the top exporters. 

Also, it is common for locals to convert their gold holdings into cash when its price soars. Data shows that gold exports from Thailand stands at 254 billion baht this year and will likely cross last year’s value of $301 billion.

Meanwhile, the USD/THB exchange rate has also retreated because of Donald Trump’s tariffs, which have helped the country boost its current surplus. The surplus, which measures the value of how much it exports and the foreign income, has jumped to $13 billion, much higher than what the central bank was expecting.

Meanwhile, the Thai baht has also done well because of a substantial government stimulus that was implemented last year as the tourism industry slowed. The government unveiled a $113 billion annual budget last year as it aimed at hitting a 5% annual GDP growth.

The risk, however, is that the strong baht will have an impact on the economy. In the first place, it has already contributed to the slow growth of the tourism industry this year. It has also impacted the country’s exports by making them more expensive globally.

USD/THB technical analysis

USDTHB price chart | Source: TradingView  The daily timeframe chart shows that the USD/TRY exchange rate has pulled back from last year’s high of 37.23 to 32.35. 

It has continued to move below the 50-day and 100-day Exponential Moving Averages as the sell-off continued. This downtrend has also eased a bit in the past few weeks.

The most likely USD/THB forecast is bearish, with the next key support level to watch being at the year-to-date low of 31.60. A move above the resistance level at 33 will invalidate the bearish outlook.

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