USD/THB rose 0.3% to 32.65 and has trended higher since early March as energy prices increased and gold prices eased. The baht is down 3.5% against the US dollar year-to-date, versus a -1.3% average move for Asian currencies ex-Japan. February exports grew 9.9% year-on-year, below a Bloomberg consensus of 17.0%, and down from 24.4% in January, the weakest growth in three months. The Trade Policy and Strategy Office (TPSO) reported two-sided risks to export growth.

Key Trade And Currency Drivers

Imports rose 31.8% year-on-year, above a Bloomberg consensus of 25.0%, and up from 29.4% in January, the fastest since December 2021. Capital goods increased 49.3% versus 29.5%, and intermediate goods rose 53.3% versus 20.3%, the strongest since August 2021. Thailand’s trade balance stayed in deficit at about -USD2.8bn, compared with a Bloomberg consensus of +USD1.0bn, and versus -USD3.3bn in January. The Ministry of Commerce forecast 2026 exports in a range of -3.1% to 1.1%, with a review due in April. TPSO linked the outlook to the war’s effects and whether US importers bring forward shipments before a 10% global tariff expires in July. The article notes it was produced using an AI tool and reviewed by an editor. The Thai Baht is clearly showing weakness against its regional peers, making it a target for bearish positions in the coming weeks. A persistent trade deficit and higher global energy costs are the main drivers behind this underperformance. We should therefore see the current upward trend in the USD/THB pair as likely to continue. With Brent crude futures consistently trading above $95 a barrel, Thailand’s import bill will remain inflated, putting further pressure on its current account. The interest rate differential is also a key factor, as the Bank of Thailand held its policy rate at 2.50% in its February 2026 meeting while the US Federal Reserve maintains a hawkish stance. This environment makes holding US dollars more attractive than holding the Baht.

Options Strategy And Volatility Setup

We see an opportunity in purchasing USD/THB call options with expirations in the next one to two months, targeting a move towards the 33.00 level. This strategy offers a defined risk while capitalizing on the current momentum we are observing. This pattern is reminiscent of what we saw back in mid-2022, when a spike in energy costs similarly pushed the pair above 36. While the surge in capital and intermediate goods imports is worsening the short-term trade balance, we must watch it closely. This data suggests businesses were investing heavily after the political situation stabilized in late 2025, which could signal a future rebound in manufacturing and exports. A sudden improvement in export data could quickly reverse the Baht’s downward trend. The wide range of export forecasts, from -3.1% to +1.1%, signals significant market uncertainty, which we can use to our advantage. Given the two-sided risks mentioned, including the US tariff expiry in July, implied volatility may be underpriced. This suggests strategies that benefit from a large price swing, such as buying options, could be profitable. Create your live VT Markets account and start trading now.

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