Mitihoon – Siam Commercial Bank (SCB) has unveiled a strategic transformation of its SCB Financial Markets Function (SCBFM), positioning it as a “strategic financial partner” for corporate clients, institutional investors, and retail customers. Evolving from its role as a leading player in exchange rate services, SCBFM now offers five core products and services designed to enhance risk management, unlock investment opportunities, and support long-term wealth creation amid heightened currency volatility. The initiative comes as global uncertainties, including the renewed U.S. tariff policy under Trump 2.0, contribute to the most volatile currency conditions in years. SCBFM integrates AI and machine learning to analyze data and recommend tailored financial solutions aligned with individual business models. With expert daily and monthly currency analyses, SCBFM equips clients to manage multidimensional risks effectively. The bank forecasts the baht to remain highly volatile throughout the year, projecting a year-end range of 31.50-32.50 baht/USD.
Mr. Patrick Poulier, First Executive Vice President, Head of Financial Markets Function and Head of Private Banking Relationship Management at Siam Commercial Bank, stated that the SCB Financial Markets Function (SCBFM) is committed to delivering products and services that help business clients manage financial risks. While it is particularly strong in the foreign exchange (FX) space, today’s financial markets are increasingly volatile, driven by geopolitical tensions and trade wars. A key concern is the uncertainty surrounding U.S. import tariffs under President Donald Trump’s policies, which continues to impact international trade. As a result, the baht has experienced heightened volatility, with fluctuations of 0.30–0.40 baht overnight in some instances. In response to this rapidly evolving economic landscape, SCBFM is evolving into a “strategic financial partner” for business clients, institutional investors, and retail customers, offering comprehensive solutions in risk management, investment, and global growth to meet diverse client needs and support long-term wealth creation.
As a “strategic financial partner” to business clients, institutional investors, and retail customers, SCB Financial Markets offers five core products and services, including:
- Foreign Exchange and Risk Management Solutions – Tailored FX Spot, Forward and Options to address currency exposure for cross-border businesses.
- Expanded Service Offerings – New FX products and currency pairs to support regional and emerging-market business expansion.
- Digital FX Platforms – Tools like FX Online and FX API to seamlessly integrate with clients’ treasury systems, plus retail bond trading via the SCB EASY app.
- Structured Notes – Investment products linked to currencies, equities, and interest rates, catering to diverse return objectives and risk appetites.
- Electronic Foreign Currency Deposit (E-FCD) Accounts – Solutions that help manage both currency risk and liquidity management.
“FX risk management alone is no longer sufficient. SCBFM is committed to developing products that not only mitigate risks but also optimize returns and liquidity, especially for institutional and retail clients,” Mr. Patrick Poulier added. “With our ‘Digital Bank with Human Touch’ strategy, we continue to expand our product suite, including innovations like Currency Futures via the Thailand Future Exchange (TFEX) and advanced analytics powered by AI and Machine Learning, ensuring clients thrive amid volatility with secure, modern financial tools.”
Mr. Wachirawat Banchuen, Senior Financial Markets Strategist at Siam Commercial Bank, stated that the Thai baht remains highly volatile this year. It depreciated to a peak of approximately 35.00 baht per US dollar before strengthening to around 32.40 baht per US dollar, a 7.4% swing within less than two months. This volatility stems from both domestic and external uncertainties. Despite Thailand’s fragile economic outlook and slower growth prospects, the baht’s recent appreciation is mainly driven by the depreciation of the US dollar. Global financial market trends have triggered a cyclical weakening of the dollar. Trade barriers, particularly rising import tariffs, have heightened uncertainty and dampened investor confidence in US governance and economic restructuring, which is expected to take time and may weigh on the economy in the short term. As a result, investor appetite for US assets has diminished. Additionally, the fiscal stimulus measures proposed by President Trump, including increased government spending and tax cuts, have raised concerns about a widening fiscal deficit and long-term fiscal sustainability. This has prompted investors to diversify their investments away from US assets. Consequently, capital has begun flowing out of the US toward Europe and emerging markets in Asia (EM-Asia), strengthening regional currencies including the baht. A key indicator of this trend is the recent inflow of foreign capital into the Thai government bond market.
The baht is expected to remain under appreciation pressure throughout this year due to several key factors:
- Continued US dollar weakness: The trend of US dollar depreciation is likely to persist, at least in the near term. Global investors are actively reducing their concentration risk in US assets, prompting capital outflows from the US and exerting further downward pressure on the dollar.
- Potential trade agreement implications: Upcoming US trade agreements may include provisions that indirectly weaken the dollar. Although the US government has denied such intentions, trade negotiations, especially with Asian countries, are frequently accompanied by speculation about currency intervention. During such periods, Asian currencies like the Taiwanese dollar and Korean won often appreciate, which could place additional upward pressure on the baht over the medium to long term.
- Easing of the trade war and yuan stabilization: Signs that the US-China trade conflict may be moderating, along with supportive economic measures from the Chinese government, have limited the yuan’s depreciation. Given the strong correlation between the baht and the yuan, this has reduced downward pressure on the baht.
- High gold prices: The continued upward trend in gold prices also supports baht appreciation.
Mr. Wachirawat noted that the baht’s appreciation is likely to be modest and may lag behind other regional currencies. This is primarily because Thailand’s foreign investment remains relatively low, resulting in limited repatriation flows. Compared to countries such as Singapore, Taiwan, Korea, and Malaysia, Thailand holds significantly fewer foreign assets (both equities and bonds), reducing the potential for repatriation-driven appreciation. Moreover, foreign investor interest in Thai assets remains subdued. This is reflected in the relatively low foreign ownership of Thai government bonds, currently around 9.8%, which is below the levels observed in many neighboring countries. Additionally, the weight of Thai government bonds in the JPMorgan Government Bond Index–Emerging Markets has been reduced to 8.8%, further diminishing the likelihood of strong capital inflows into Thailand amid broader inflows into the Asian region. As a result, the baht is expected to appreciate gradually, with the exchange rate projected to be in the range of 31.50–32.50 baht per US dollar by year-end.
An important factor to monitor during this period is the ruling by the US Trade Court regarding the import tariff measures implemented under President Trump. While the court has deemed these measures unlawful, the US government has appealed the decision, allowing the tariffs to remain in effect temporarily. This development may help mitigate the risk of baht depreciation, as the US government would need to invoke alternative legal provisions to reintroduce tariffs. For instance, Section 122 caps tariff increases at 15%, while Section 301 requires lengthy investigations into trading practices and would likely focus on the US’s major trading partners first. As a result, even if Thailand faces additional tariffs, the impact on the baht may be limited. However, the situation remains fluid. A key deadline in early July could bring renewed pressure on the baht. In the short term (1–2 months), the baht is expected to trade within a range of 32.30–33.30 baht per US dollar.
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