Forex News
- Banxico cuts rates to 6.50%, ending its easing cycle.
- Hormuz attacks revive haven demand, pressuring the Mexican Peso.
- Rate differential still favors Peso, but volatility risks increase.
The Mexican Peso erases some of its earlier gains and drops some 0.13% as the USD/MXN pair advances after the Bank of Mexico (Banxico) cut rates and warned that the easing cycle has ended. The exotic pair trades at 17.27 after testing a low of 17.19.
USD/MXN rebounds after Banxico signals pause, Middle East risks rise
Markets' sentiment swung from strong optimism to pessimism as the US launched attacks on several targets in the Strait of Hormuz, according to a US official, as reported by Axios’ Ravid. In the meantime, Iran’s top military command said that the US violated the ceasefire, targeting an Iranian oil-flagged vessel and another ship entering the Strait of Hormuz.
Aside from this, Banxico’s decision to cut interest rates by 25 basis points, as expected, from 6.75% to 6.50%, is weighing on the Mexican currency, which has so far appreciated by over 4% year-to-date (YTD). The decision to lower rates was not unanimous; it was a 3-2 vote, with Deputy Governors Galia Borja and Jonathan Heath voting to hold rates unchanged.
Worth noting that Banxico warned that “Looking ahead, the governing board estimates that it will be appropriate to maintain the reference rate at its current level.” Therefore, the easing cycle, which began in March 2024, has ended.
Banxico’s monetary policy statement revealed that the board considers “The balance of risks for the trajectory of inflation within the forecast horizon remains biased to the upside.” Despite this, considered to lower rates based on “the observed levels of the exchange rate, the weakness of economic activity, which implies the absence of demand-related pressures in the economy, and the level of monetary restriction implemented.”
The board also updated its inflation forecasts, expecting headline and underlying inflation to hit their 3% goal by the second quarter of 2027.
In the US, jobless claims data were solid, rising by 200K in the week ending May 2, below estimates of 205K but exceeding forecasts of 190K. Other data showed that the US Challenger Job Cuts rose from 60.62K to 83.687K, according to Challenger, Grey & Christmas.
Earlier, some Federal Reserve officials commented on monetary policy and inflation. Cleveland Fed's Beth Hammack expects rates to remain on hold for some time, noting growing concerns about persistent inflation. San Francisco Fed's Mary Daly reaffirmed the commitment to the 2% inflation target, describing policy as slightly restrictive and suggesting that prices would ease if geopolitical tensions subside. Minneapolis Fed President Neel Kashkari called inflation too high and expressed optimism about AI.
Given the fundamental backdrop and the end of Banxico’s easing cycle, the USD/MXN might consolidate in the near term, but the interest rate differential continues to favour the Mexican Peso. But if geopolitical tensions in the Middle East arise, it could open the door to a depreciation of the Peso due to haven flows into the US Dollar.
USD/MXN Price Forecast: Technical outlook
The USD/MXN seems to have bottomed at around the February 8 daily low of 17.08, as the Mexican central bank continued to lower borrowing costs. During the year, the interest rate differential reduced by 75 basis points, and with Banxico announcing a pause, this could open the door for a slight recovery.
High geopolitical risks will keep the US Dollar bid, while emerging-market currencies could depreciate. In that outcome, the pair’s first resistance would be the 20-day Simple Moving Average (SMA) at 17.40. On further strength, the next stop would be the 50-day SMA at 17.49, ahead of the 100-day SMA at 17.64.
On the other hand, if the Peso appreciates, the first support seen is the year-to-date (YTD) low of 17.08, ahead of the 17.00 figure.
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- NZD/USD trades with a softer tone as investors remain cautious amid rapidly shifting headlines surrounding potential US-Iran peace negotiations.
- Initial optimism faded after reports indicated that Iran had rejected parts of the US-backed proposal to reopen the Strait of Hormuz.
- US Initial Jobless Claims rose to 200K but remained below expectations.
The NZD/USD pair is trading with a softer tone near the 0.5940 region on Friday, pressured by cautious market sentiment as investors continue tp react to rapidly changing headlines surrounding the potential peace agreement between the United States (US) and Iran.
Initial optimism supported risk-sensitive currencies after reports suggested both sides were moving toward a temporary framework that could reduce tensions in the Middle East and restore shipping through the Strait of Hormuz. Those developments initially weakened the US Dollar (USD) and improved overall market sentiment.
However, risk appetite later faded after reports indicated that key disagreements remain unresolved. Iran reportedly rejected parts of the US-backed reopening proposal for the Strait of Hormuz, reviving concerns about prolonged geopolitical instability and limiting upside momentum in currencies tied to global growth and risk sentiment, including the New Zealand Dollar (NZD).
Meanwhile, the USD remains supported by relatively resilient US labor-market data ahead of Friday’s Nonfarm Payrolls report. Initial Jobless Claims rose to 200K from 190K but still came in below market expectations near 206K, while Continuing Claims declined to 1.766 million, signaling that layoffs remain historically low despite some signs of moderation in economic activity. Falling Treasury yields have limited broader USD strength, but markets remain cautious ahead of key US employment data.
Short-term technical analysis:
On the four-hour chart, NZD/USD trades at 0.5941, holding a modest bullish bias as it remains above both the 20-period Simple Moving Average (SMA) at 0.5927 and the 100-period SMA at 0.5896. The pair is grinding higher after reclaiming nearby horizontal supports, while the Relative Strength Index around 54 hints at steady, rather than aggressive, upside momentum.
On the upside, immediate resistance emerges at 0.5954, followed by 0.5965 if buyers extend the move. On the downside, initial support is seen at 0.5940, ahead of 0.5935, with the 20-period SMA at 0.5927 and the 100-period SMA at 0.5896 reinforcing the broader constructive structure on deeper pullbacks.
(The technical analysis of this story was written with the help of an AI tool.)
OCBC strategists Sim Moh Siong and Christopher Wong describe USD/IDR as easing from overbought territory as hopes of a US–Iran deal support sentiment. Bank Indonesia’s (BI) tighter rules on cash FX purchases and comments that the Rupiah (IDR) is undervalued back stabilization efforts. They note intact bullish momentum but early RSI rollover, with support at 17,267 and 17,200 and resistance near 17,440.
BI measures and technical backdrop
"USD/IDR eased lower, alongside the move seen in most other USD/Asia while oil prices fell. Hopes of US-Iran deal fuelled optimism."
"Bullish momentum on daily chart intact while RSI shows tentative signs of turning lower from near overbought conditions."
"Elsewhere, BI has recently (5 May) tightened rules on cash purchases of foreign currency (without support documents), lowering the cap to USD25,000 from USD50,000. This is in support of IDR stabilization measures while Governor Perry said that the IDR is undervalued and should strengthen."
"Support seen at 17,267 (23.6% fibo retracement of 2026 low to high), 17,200 (21 DMA). Resistance at 17,440 levels. Further pullback plausible should geopolitical tensions de-escalate more meaningfully."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
DBS Group Research economist Ma Tieying expects the Bank of Korea (BoK) to keep its base rate at 2.50% at the May 28 meeting, but now projects a single 25 bps hike in 3Q 2026 to 2.75%. The report cites firmer inflation, rising PPI and inflation expectations, but also K‑shaped growth and sectoral weakness as constraints on aggressive tightening.
DBS flags one 3Q rate hike
"Following our earlier upgrade to 2026 GDP and inflation forecasts, we now also revise our interest rate outlook, calling for one 25bps hike in 3Q."
"Recent data support the case for the Bank of Korea to keep the base rate unchanged at 2.50% at the May 28 meeting."
"Looking ahead, we see a rising likelihood of a 25bps rate hike in 3Q, which would bring the base rate to 2.75%."
"Inflation is expected to pick up more noticeably in May, with headline CPI potentially reaching 3% and core CPI beginning to reflect some pass-through."
"As second-round inflation pressures start to build, the BOK is likely to adopt a more vigilant stance in the coming months."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Here is what you need to know for Friday, May 8:
The US Dollar Index (DXY) is trading with a softer tone near the 98.10 area as markets continue reacting to rapidly shifting headlines surrounding the potential peace agreement between the United States (US) and Iran.
Initial optimism emerged after reports suggested that both sides were moving toward a temporary deal that could reopen the Strait of Hormuz and reduce tensions across the Middle East.
However, sentiment later turned more cautious after additional reports indicated that major disagreements remain unresolved, particularly regarding maritime access, sanctions relief, and broader security conditions. Iran reportedly rejected parts of the US-backed reopening framework for the Strait of Hormuz, increasing uncertainty and limiting the improvement in overall risk appetite.
Meanwhile, US economic data showed Initial Jobless Claims rising to 200K from 190K, though the figure remained below market expectations near 205K–206K. Continuing Claims declined to 1.766 million, signaling that layoffs remain historically low and reinforcing the view that the US labor market remains resilient ahead of Friday’s Nonfarm Payrolls report.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.13% | 0.25% | 0.03% | 0.16% | 0.08% | 0.07% | |
| EUR | -0.03% | 0.09% | 0.24% | 0.01% | 0.13% | 0.05% | 0.03% | |
| GBP | -0.13% | -0.09% | 0.13% | -0.10% | 0.03% | -0.04% | -0.07% | |
| JPY | -0.25% | -0.24% | -0.13% | -0.23% | -0.09% | -0.21% | -0.17% | |
| CAD | -0.03% | -0.01% | 0.10% | 0.23% | 0.13% | 0.05% | 0.03% | |
| AUD | -0.16% | -0.13% | -0.03% | 0.09% | -0.13% | -0.08% | -0.10% | |
| NZD | -0.08% | -0.05% | 0.04% | 0.21% | -0.05% | 0.08% | -0.02% | |
| CHF | -0.07% | -0.03% | 0.07% | 0.17% | -0.03% | 0.10% | 0.02% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD is trading near the 1.1740 zone, erasing almost all intraday losses amid easing safe-haven demand, which supports the shared currency.
GBP/USD fell around the 1.3570 region, erasing the broader pullback in the Greenback despite lingering caution across global markets.
USD/JPY elevated near the 156.80 area, amid rising US Treasury yields and ongoing uncertainty surrounding Middle East developments.
AUD/USD fell toward the 0.7220 area even as lower Oil prices support commodity-linked currencies like the Aussie.
West Texas Intermediate (WTI) Oil remains highly volatile near the $96.30 per barrel after plunging earlier in the session on optimism about a peace deal. It recovered as reports suggested negotiations remain fragile.
Gold trades with a softer tone near the $4,710 area, pressured by reduced safe-haven demand amid optimism surrounding the potential US-Iran agreement earlier in the day, though uncertainty surrounding the negotiations continues to limit downside momentum.
What’s next in the docket:
Friday, May 8:
- Germany Industrial Production March MoM YoY
- Eurozone Trade Balance March
- Canadian Employment data
- US NFP report
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- WSJ report fuels concerns over renewed US-Iran hostilities.
- Fed officials warn inflation risks could keep rates elevated.
- Traders await Friday’s NFP report for fresh US Dollar direction.
Gold (XAU/USD) edges higher on Thursday during the North American session amid heightened tensions in the Middle East due to rumors that the US is looking to restart Project Freedom. At the time of writing, XAU/USD trades at $4,705 after reaching a daily high of $4,764.
XAU/USD rises as Project Freedom rumors revive geopolitical risk
Recently, the Wall Street Journal (WSJ) reported that the White House is relaunching Project Freedom to ensure the safe passage of commercial vessels through the Strait of Hormuz. Later, a US official told Al Jazeera that reports about preparations to resume the operation were incorrect. Further data showed that Saudi Arabia and Kuwait lifted restrictions on US military use of their bases and airspace, opening the door for re-engaging hostilities between the US and Iran.
Bullion prices recoiled from a daily high of $4,764 toward the $4,700 mark, as Oil prices recovered some ground. In the meantime, the US Dollar Index (DXY), which tracks the buck’s performance against six currencies, is modestly up 0.04% at 98.05, due to Iran’s war remarks.
US Initial Jobless Claims for the week ending May 2 increased to 200K, compared to the previous figure of 190K and lower than the expected 205K. While these figures provide some support for the US Dollar, the currency's performance remains closely tied to developments in the Middle East conflict.
Earlier, the US Challenger Job Cuts rose from 60.62K in March to 83.687K in April, according to Challenger, Grey & Christmas.
Aside from economic data, Federal Reserve (Fed) officials crossed the wires. Cleveland’s Fed Beth Hammack stated that rates “will be on hold for quite some time,” adding that businesses are getting concerned that “an inflationary mindset is starting to become entrenched in people’s minds.”
Mary Daly from the San Francisco Fed shifted to a neutral-to-hawkish stance, saying she was committed to bringing inflation back to the Fed’s 2% goal. Daly noted that policy is “slightly restrictive,” and that it could exert downward pressure on prices if the US-Iran conflict resolves.
At the same time, Minneapolis Fed President Neel Kashkari said inflation is too high and that he is optimistic about AI.
Money markets had priced in no interest rate cuts by the Federal Reserve in 2026, according to Prime Terminal data.
An escalation of the conflict could prompt traders to price in an inflationary shock due to higher Oil and natural gas prices. Hence, further downside in Gold is expected, as major central banks are expected to keep rates steady.
Market participants are now focusing on upcoming speeches by Federal Reserve officials and the release of Nonfarm Payrolls data this Friday, with projections indicating an increase of 62K jobs in April.
XAU/USD technical outlook: Gold faces key resistance at around $4,760
Gold prices have rebounded, surpassing the $4,650 psychological threshold and signalling potential for further appreciation, with buyers focusing on the $4,700 level. The Relative Strength Index (RSI) shifted bullishly, supporting prospects for additional short-term gains.
For XAU/USD, initial resistance lies at a descending trendline between $4,700 and $4,715. Should this barrier be exceeded, the next level of resistance is the 100-day Simple Moving Average (SMA) at $4,764. A continuation of the uptrend would target the $4,800 level, which lies above the 50-day SMA at $4,790.
On the downside, immediate support for XAU/USD is positioned at $4,650. If this level is breached, focus will shift to $4,600 ahead of the May 4 swing low at $4,500. Once hurdled, the next stop would be the March 26 daily low of $4,351, before approaching the 200-day SMA at $4,276.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Banco de Mexico (Banxico) reduced borrowing costs by 25 basis points on Thursday, as expected by market participants, from 6.75% to 6.50%, even though the central bank revealed that the “balance of risks for the trajectory of inflation within the forecast horizon remains biased to the upside.”
The central bank's decision was not unanimous, as Deputy Governors Galia Borja and Jonathan Heath voted to keep rates unchanged.
Banxico’s board noted that the decision concludes the easing cycle that began in March 2024, while adding that “economic slack is expected to be greater than previously anticipated.”
Key highlights:
BOARD MEMBERS HEATH AND BORJA VOTED TO HOLD RATE
BOARD MEMBERS RODRIGUEZ, MEJIA AND CUADRA VOTED TO CUT RATE
HEADLINE INFLATION IS PROJECTED TO CONVERGE TO TARGET IN Q2 OF 2027
LOOKING AHEAD, THE BOARD ESTIMATES IT WILL BE APPROPRIATE TO MAINTAIN THE RATE AT ITS CURRENT LEVEL
BALANCE OF RISKS FOR THE TRAJECTORY OF INFLATION WITHIN THE FORECAST HORIZON REMAINS BIASED TO THE UPSIDE
BOARD'S DECISION TOOK INTO ACCOUNT EXCHANGE RATE LEVELS, WEAKNESS OF ECONOMIC ACTIVITY, LEVEL OF MONETARY RESTRICTION IMPLEMENTED
ECONOMIC SLACK IS EXPECTED TO BE GREATER THAN PREVIOUSLY ANTICIPATED
THERE IS NO EVIDENCE OF SECOND-ROUND EFFECTS FROM THE FISCAL MEASURES ADOPTED AT THE BEGINNING OF THE YEAR
DECISION CONCLUDES THE CYCLE THAT BEGAN IN MARCH 2024
Banxico's inflation forecast
Mexican inflation does not justify Banxico’s decision
Earlier, the national statistics agency in Mexico (INEGI) reported that the Consumer Price Index (CPI) rose by 4.45% YoY in April. Core figures were also up by 4.26%, down a tenth of a percentage point from economists' estimates.
Banxico FAQs
The Bank of Mexico, also known as Banxico, is the country’s central bank. Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%.
The main tool of the Banxico to guide monetary policy is by setting interest rates. When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. The rate differential with the USD, or how the Banxico is expected to set interest rates compared with the US Federal Reserve (Fed), is a key factor.
Banxico meets eight times a year, and its monetary policy is greatly influenced by decisions of the US Federal Reserve (Fed). Therefore, the central bank’s decision-making committee usually gathers a week after the Fed. In doing so, Banxico reacts and sometimes anticipates monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised rates, Banxico did it first in an attempt to diminish the chances of a substantial depreciation of the Mexican Peso (MXN) and to prevent capital outflows that could destabilize the country.
UOB economists Enrico Tanuwidjaja and Sathit Talaengsatya argue that Thailand’s sharp April Consumer Price Index (CPI) jump is driven mainly by energy and selective food pass-through rather than broad demand-led reflation. They keep headline CPI forecasts at 1.4% for 2026 and 1.2% for 2027 and expect Bank of Thailand (BoT) to hold the policy rate at 1.00% through 2027.
Energy shock drives Thai inflation spike
"We keep our inflation projection unchanged: headline CPI at 1.4% in 2026 and 1.2% in 2027, and BOT on hold at 1.00% through 2026–27. The Apr print raises near-term upside risks, but weak demand, a negative output gap, administrative price smoothing, and limited wage-price spiral risk should cap second-round effects."
"Looking ahead, the official inflation outlook has shifted higher, but authorities still treat the shock as supply-led and monitorable rather than persistent domestic overheating. In its written base case, the Ministry of Commerce (MOC) maintains its 2026 headline inflation forecast range at 1.5%–2.5%, with a 2.0% midpoint, based on Dubai crude at USD75–85/bbl, USD/THB at 32.5–33.5, and GDP growth of 1.5%–2.5%. The MOC expects May inflation to remain positive, supported by domestic retail oil prices, prepared-food pass-through, higher pork and chicken prices, higher travel costs, and broader producer-cost pressure, partly offset by cost-of-living measures, lower electricity charges versus last year, and the slow recovery of fresh-fruit prices."
"In terms of monetary policy, the BOT’s MPC voted unanimously 6–0 on 29 Apr to maintain the policy rate at 1.00%. The BOT now forecasts GDP growth of 1.5% in 2026 and 2.0% in 2027, headline CPI of 2.9% in 2026 and 1.5% in 2027, and core CPI of 1.6% and 1.5%, respectively. Importantly, the central bank still expects price increases to be neither broad-based nor persistent under weak demand conditions, with medium-term inflation expectations anchored."
"We also maintain our call that BOT will keep the policy rate unchanged at 1.00% through 2026 and 2027, looking through first-round supply-side inflation unless second-round effects broaden into wages, services prices, inflation expectations, or disorderly FX pass-through."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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