Thailand's political instability threatens baht recovery despite rebound from two-year low.

Thailand's political instability may hinder the baht's recovery, as the currency has rebounded since a two-year low in May against the US dollar. The new government, led by Paetongtarn Shinawatra, has proposed lower interest rates and criticized the central bank, raising concerns about Thailand's household debt and investment attractiveness. The Bank of Thailand is expected to maintain interest rates at 2.5%, but the baht's resurgence may still face resistance due to political uncertainty.