The Thai baht weakened to around 33 per US dollar, its lowest level in ten months, as escalating geopolitical tensions in the Middle East weighed on market sentiment. The currency remains under sustained pressure as the conflict involving the US, Israel, and Iran enters its fourth week, with tensions intensifying following strikes on Iranian infrastructure and a forceful response from Tehran.
President Donald Trump has issued a 48-hour ultimatum to reopen the key waterway, warning that military strikes will follow if the deadline is not met. In turn, Iran has threatened to close the strait and further escalate its retaliation should the attacks persist.
Brent crude prices have surged more than 50% since the onset of the conflict, driving up import costs and worsening Thailand’s terms of trade. This has added further downward pressure on the baht. The currency has swung by about 9% since the start of the year, underscoring its heightened sensitivity to global risk sentiment and energy price shocks.
