what's going on with the Thai Baht

[soalbundy]

22 hours ago, GeKoSc said:

What have the costly Baht to do with Trump? The Baht is strong against all principal currencies...

Trump's policies have brought unrest in the currency markets (trade restrictions etc.) he is ONE of the reasons for the weakness in the Euro, Brexit being another for both the Euro and the pound. Australia hangs on the teat of China, Trump's policies of weakening China hasn't helped Australia or the EU for that matter.

[Yellowtail]

1 hour ago, soalbundy said:

Trump's policies have brought unrest in the currency markets (trade restrictions etc.) he is ONE of the reasons for the weakness in the Euro, Brexit being another for both the Euro and the pound. Australia hangs on the teat of China, Trump's policies of weakening China hasn't helped Australia or the EU for that matter.

Any particular Trump policy or policies you feel are causing this?

[morrobay]

Sure Trump has pressured the Fed to slack off on interest rate increases. And so they have following all the past saps at the Fed starting with that hack (Mr 2008 financial crisis) Greenspan.

[Yellowtail]

5 minutes ago, morrobay said:

Sure Trump has pressured the Fed to slack off on interest rate increases. And so they have following all the past saps at the Fed starting with that hack (Mr 2008 financial crisis) Greenspan.

Yeah, under Trump all the sudden the fed is in a hurry to raise rates...

[soalbundy]

52 minutes ago, Yellowtail said:

Any particular Trump policy or policies you feel are causing this?

Trade tariffs ?

[Yellowtail]

15 minutes ago, soalbundy said:

Trade tariffs ?

You're asking me?

 

I would think raising tariffs would weaken a currency not strengthen it.

 

 

[soalbundy]

15 hours ago, Yellowtail said:

You're asking me?

 

I would think raising tariffs would weaken a currency not strengthen it.

 

 

It has caused turmoil in the international money markets and has caused turmoil for some American firms, disrupting their supply chains or making some of their products more expensive or reducing profit margins. It has weakened China and consequently reduced industrial activity in some countries relying on the Chinese market, Germany for instance, which has a kickback on the worth of the Euro, in addition to Brexit. 'America first' has delayed investment in many countries, especially Europe which thinks Europe is going to be Trump's next target when the Chinese issue is resolved, this will cause tit for tat reactions which aren't good for trade. He seems to be on a world kamikaze course. 

[Yellowtail]

28 minutes ago, soalbundy said:

It has caused turmoil in the international money markets and has caused turmoil for some American firms, disrupting their supply chains or making some of their products more expensive or reducing profit margins. It has weakened China and consequently reduced industrial activity in some countries relying on the Chinese market, Germany for instance, which has a kickback on the worth of the Euro, in addition to Brexit. 'America first' has delayed investment in many countries, especially Europe which thinks Europe is going to be Trump's next target when the Chinese issue is resolved, this will cause tit for tat reactions which aren't good for trade. He seems to be on a world kamikaze course. 

Europe is not a growth market and most US multinationals have been on hols or downsizing in the region since long before Trump got in office. 

 

A better argument might be that Trump's corporate tax cuts prompted the repatriation of profits held offshore and slowed the flow of US companies relocating their headquarters to tax-friendly countries like Ireland. I would think this would have more of an effect on currency, but I think it benefits the US.

 

I thought the tariffs were bone-headed, and while some companies benefited, many more were hurt. That said, one could make an argument that assuming they are being used as a negotiating tool they could have a positive long-term impact on the US economy.

 

[Spock]

To send money via bahtsmart today from Australia, for the first time I am looking at a rate below 22 baht - 21.5 baht. It's currently 22.2 baht - $A1 on superrich. The room in which I regularly stay in Rangsit costs the same in Baht, but has gone from $23 five year's ago, to $27 2 years back, and is today priced at $34 Australian. I will go to Cambodia where I can earn some money teaching and also fill in some time in the day that would otherwise be misspent or endured. Thailand is getting to expensive for Australians. Today the dollar dropped to 70+c from 72+c against the US dollar. Any further and we are truly in deep shit!

[Yellowtail]

20 minutes ago, Spock said:

To send money via bahtsmart today from Australia, for the first time I am looking at a rate below 22 baht - 21.5 baht. It's currently 22.2 baht - $A1 on superrich. The room in which I regularly stay in Rangsit costs the same in Baht, but has gone from $23 five year's ago, to $27 2 years back, and is today priced at $34 Australian. I will go to Cambodia where I can earn some money teaching and also fill in some time in the day that would otherwise be misspent or endured. Thailand is getting to expensive for Australians. Today the dollar dropped to 70+c from 72+c against the US dollar. Any further and we are truly in deep shit!

 

Yes, apparently it's all Trump's fault...

[AtoZ]

On 2/5/2019 at 4:09 PM, Thomas J said:

Currencies flow and exchange based on demand just like any other commodity.

Not many countries get fools getting married to hookers and building houses 6 months after the first F... 

 

In and Out, In and Out

[marcusarelus]

3 minutes ago, AtoZ said:

Not many countries get fools getting married to hookers and building houses 6 months after the first F... 

 

In and Out, In and Out

If a hooker can cook and clean what is foolish about it?  Grab her quick.  6 months she might be gone. 

[Corruption 101]

On 2/7/2019 at 5:03 PM, Spock said:

To send money via bahtsmart today from Australia, for the first time I am looking at a rate below 22 baht - 21.5 baht. It's currently 22.2 baht - $A1 on superrich. The room in which I regularly stay in Rangsit costs the same in Baht, but has gone from $23 five year's ago, to $27 2 years back, and is today priced at $34 Australian. I will go to Cambodia where I can earn some money teaching and also fill in some time in the day that would otherwise be misspent or endured. Thailand is getting to expensive for Australians. Today the dollar dropped to 70+c from 72+c against the US dollar. Any further and we are truly in deep shit!

Latest figures for January from Core Logic show the crash in Australian property values is accelerating.  It has also spread to all capital cities (with the exception of Canberra that is supported by negatively geared investment properties owned by public servants).

 

While interest rates are set to rise in the US and other countries, the RBA last Tuesday foreshadowed that rates in Australia may now, more than likely than not, move down.  They are already at historically low levels never before seen. They will now move down below 1% and probably to zero.  

 

When the GFC occurred the cash rate in Australia was circa 7 or 8% so it was easy to drop rates by a significant margin to keep the economy afloat.

 

The GFC was a decade ago and the usually economic cycle for markets is 11 years maximum.  So a major correction is on the way.  Notwithstanding the fact that a cyclic correction is now due, there are also any number of black swan events that could trigger a collapse.  US-China conflict in the South China Sea is one relevant example.

 

If there is a black swan event and Australia is already bottomed out with a 0% cash rate, what will the RBA do. That is a rhetorical question of course. There is nothing they can do because the do not have any dry powder left.

 

Hold onto your hat Spock. During the GFC the Aussie dollar went down to 61c US.  It is not far away from that level now and there has been no black swan event.  I have read some forecasts predicting the AUD to go as low as 40c US.  That would mean the AUD:THB rate would be around 14-15 baht.

 

Australian property is already down 10% from peak.  It will fall another 30 to 40% from here.  The negative wealth effect will hobble the domestic economy. But again the RBA can do nothing because the cash rate is already close to 0.

 

If you have any AUD, I suggest dumping it now before it is too late. Those in the know are already getting out in droves to protect their capital.  Have a look at how the share price for the gold producer ASX:EVN has rallied since the start of this year. 

 

If you are working in Cambodia make sure you save every Riel you earn.  You will get a small fortune for them in a few years time when you exchange them for Aussie Pesos.

Edited February 8, 2019 by Corruption 101

[bomber]

2 hours ago, Corruption 101 said:

Latest figures for January from Core Logic show the crash in Australian property values is accelerating.  It has also spread to all capital cities (with the exception of Canberra that is supported by negatively geared investment properties owned by public servants).

 

While interest rates are set to rise in the US and other countries, the RBA last Tuesday foreshadowed that rates in Australia may now, more than likely than not, move down.  They are already at historically low levels never before seen. They will now move down below 1% and probably to zero.  

 

When the GFC occurred the cash rate in Australia was circa 7 or 8% so it was easy to drop rates by a significant margin to keep the economy afloat.

 

The GFC was a decade ago and the usually economic cycle for markets is 11 years maximum.  So a major correction is on the way.  Notwithstanding the fact that a cyclic correction is now due, there are also any number of black swan events that could trigger a collapse.  US-China conflict in the South China Sea is one relevant example.

 

If there is a black swan event and Australia is already bottomed out with a 0% cash rate, what will the RBA do. That is a rhetorical question of course. There is nothing they can do because the do not have any dry powder left.

 

Hold onto your hat Spock. During the GFC the Aussie dollar went down to 61c US.  It is not far away from that level now and there has been no black swan event.  I have read some forecasts predicting the AUD to go as low as 40c US.  That would mean the AUD:THB rate would be around 14-15 baht.

 

Australian property is already down 10% from peak.  It will fall another 30 to 40% from here.  The negative wealth effect will hobble the domestic economy. But again the RBA can do nothing because the cash rate is already close to 0.

 

If you have any AUD, I suggest dumping it now before it is too late. Those in the know are already getting out in droves to protect their capital.  Have a look at how the share price for the gold producer ASX:EVN has rallied since the start of this year. 

 

If you are working in Cambodia make sure you save every Riel you earn.  You will get a small fortune for them in a few years time when you exchange them for Aussie Pesos.

the tools to fend of a recession are lost when rates are already at 0% or just above,UK has barely anything left to play with the EU nothing at all along with Japan,why do you think the FED hiked so many times in the last few years,at least they can now tinker a bit,also the forthcoming recession is the first in history with so many developed nations entering with pitifully low rates,it will only make the recovery harder and longer,it legacies still lie with the 2007/8 crisis. 

Edited February 8, 2019 by bomber

[Thomas J]

On 2/5/2019 at 9:19 PM, bomber said:

Have you check the UK,EU and Japanese rates.The US rates are sky high

The current 5 year treasury yield as of February 06, 2019 is 2.50% If that is sky high you have a different metric than I do. That is break even with inflation and perhaps minus after taxes. By contrast Brazil 9.09%, India 7.52%, Mexico 8.40%.  Yes that is not an apples to apples comparison since those countries are riskier but the rates are not just marginally higher they are exponentially higher.  I agree with you that the US rates compared to the UK, EU and Japan are high.  But those currencies like the USD have been weak compared to the Baht too.  The USD in the past year has strengthened relative to the Euro and Sterling in part because of the lack of any rates in those countries.  A year ago the USD was about .79 to the Euro and now about .88.  Again money flows where it is treated better.  The baht is not necessarily strong the Euro, Sterling, USD and Canadian are currently weak. 

 

[Corruption 101]

31 minutes ago, Thomas J said:

The current 5 year treasury yield as of February 06, 2019 is 2.50% If that is sky high you have a different metric than I do. That is break even with inflation and perhaps minus after taxes. By contrast Brazil 9.09%, India 7.52%, Mexico 8.40%.  Yes that is not an apples to apples comparison since those countries are riskier but the rates are not just marginally higher they are exponentially higher.  I agree with you that the US rates compared to the UK, EU and Japan are high.  But those currencies like the USD have been weak compared to the Baht too.  The USD in the past year has strengthened relative to the Euro and Sterling in part because of the lack of any rates in those countries.  A year ago the USD was about .79 to the Euro and now about .88.  Again money flows where it is treated better.  The baht is not necessarily strong the Euro, Sterling, USD and Canadian are currently weak. 

 

Don't forget to add the AUD to your list.

[spidermike007]

One positive outcome from all of this latest election news, will be that the country will likely become a pariah worldwide, and the baht could take a major hit. Not a good thing for the Thai people. But, for once, good news for ex-pats. 

[mfd101]

8 minutes ago, spidermike007 said:

One positive outcome from all of this latest election news, will be that the country will likely become a pariah worldwide, and the baht could take a major hit. Not a good thing for the Thai people. But, for once, good news for ex-pats. 

Hope you're right, but the curves on the Xe.com graph for 2014 don't give much reassurance ...

[soalbundy]

3 minutes ago, spidermike007 said:

One positive outcome from all of this latest election news, will be that the country will likely become a pariah worldwide, and the baht could take a major hit. Not a good thing for the Thai people. But, for once, good news for ex-pats. 

I can't see how, Thailand will be seen as a safe haven and one of the few places where your money can earn something, money will/is pouring in from investors raising the Baht even further. There are limits of course when it starts hurting exports, I don't think tourism will be badly affected, an increase of say 5% or even 10% in the Bahts value won't have much effect on a budget over a 3 week time period, unfortunately a large effect on an expats budget. The longer the spat between the USA and China the better for Thailand as their industry is already taking up some of the slack in the supply chains.

[spidermike007]

38 minutes ago, soalbundy said:

I can't see how, Thailand will be seen as a safe haven and one of the few places where your money can earn something, money will/is pouring in from investors raising the Baht even further. There are limits of course when it starts hurting exports, I don't think tourism will be badly affected, an increase of say 5% or even 10% in the Bahts value won't have much effect on a budget over a 3 week time period, unfortunately a large effect on an expats budget. The longer the spat between the USA and China the better for Thailand as their industry is already taking up some of the slack in the supply chains.

Not sure if I agree with your reasoning. The vast majority of the tourist world (with the exception of the Chinese and the Russians) absolutely despise military leaders and juntas. Thailand initially "allowed" the junta to take over, to calm down the nation, after the Bangkok Shutdown, which was a ridiculous chapter in the nation's history. That excuse no longer applies. It is all about the insatiable thirst for power and fortune now. This has nothing whatsoever to do with the welfare of the nation, and 90% of the Thai people know that. The army is despised, and my guess is that if she is not permitted to run, voter turnout will be dismal. Why vote at all?

 

The nation will suffer incalculable ridicule and will be criticized from every quarter. Many will shun Thailand as a tourist destination, foreign investment will drop, and cash outflow will accelerate to unprecedented levels. The future under the hapless, and incompetent Prayuth and the army will be quite dark, and dim. And there is another unintended consequence from all of this, that cannot be discussed on this forum. But, perhaps you can imagine what it is. All things must come to an end. 

[mogandave]

Why has everyone hating the military (apparently) not had much on an impact on tourism up until now?

Seems the military has been in charge fo a pretty good while...

[CGW]

1 hour ago, spidermike007 said:

One positive outcome from all of this latest election news, will be that the country will likely become a pariah worldwide, and the baht could take a major hit. Not a good thing for the Thai people. But, for once, good news for ex-pats. 

I hope you are correct, but the Baht never seems to follow expectations! since 97 I have read and witnessed numerous "incidents" that should have devalued the Baht (again!), yet mysteriously it has just chugged along. My base currency has long been USD so believe me I have watched exchange rates closely, or should I say I used to, in recent years I came to the realisation it was virtually bullet proof.

Why, I have never worked out. ????

[spidermike007]

3 minutes ago, CGW said:

I hope you are correct, but the Baht never seems to follow expectations! since 97 I have read and witnessed numerous "incidents" that should have devalued the Baht (again!), yet mysteriously it has just chugged along. My base currency has long been USD so believe me I have watched exchange rates closely, or should I say I used to, in recent years I came to the realisation it was virtually bullet proof.

Why, I have never worked out. ????

 

Supposedly, it has to do primarily with inflows, inward flowing investments, and related exports. But, all of that could change, with another several years of this incredibly incompetent administration. It could change quickly. Consumer and business sentiment is a strange and fickle thing. The authorities would never consider that, as they consider Thailand to be the center of the Milky Way. But, we all know that is the furthest thing from reality. 

[Kwasaki]

50 minutes ago, mogandave said:

Why has everyone hating the military (apparently) not had much on an impact on tourism up until now?

Who's hating the military it has to be a minority.

[HAKAPALITA]

Apart from a few lefty fan room ferangs, most seem happy with the set up Thais seem happy they aint been robbed for a few years. 

[robsamui]

https://www.bloomberg.com/news/articles/2018-12-12/baht-set-to-top-emerging-market-currencies-in-stormy-2018?fbclid=IwAR0TZk2W_KJ8QIMxJiVtkD5rRd5sFA_3EnCe-qnNiaVxkSd-kn7afl9ZzM4

[mogandave]

 
Supposedly, it has to do primarily with inflows, inward flowing investments, and related exports. But, all of that could change, with another several years of this incredibly incompetent administration. It could change quickly. Consumer and business sentiment is a strange and fickle thing. The authorities would never consider that, as they consider Thailand to be the center of the Milky Way. But, we all know that is the furthest thing from reality. 

But it is the center of Southeast Asia, and it is business friendly and has a great domestic market.

I would not look for mass exodus anytime soon...

[soalbundy]

5 hours ago, spidermike007 said:

Not sure if I agree with your reasoning. The vast majority of the tourist world (with the exception of the Chinese and the Russians) absolutely despise military leaders and juntas. Thailand initially "allowed" the junta to take over, to calm down the nation, after the Bangkok Shutdown, which was a ridiculous chapter in the nation's history. That excuse no longer applies. It is all about the insatiable thirst for power and fortune now. This has nothing whatsoever to do with the welfare of the nation, and 90% of the Thai people know that. The army is despised, and my guess is that if she is not permitted to run, voter turnout will be dismal. Why vote at all?

 

The nation will suffer incalculable ridicule and will be criticized from every quarter. Many will shun Thailand as a tourist destination, foreign investment will drop, and cash outflow will accelerate to unprecedented levels. The future under the hapless, and incompetent Prayuth and the army will be quite dark, and dim. And there is another unintended consequence from all of this, that cannot be discussed on this forum. But, perhaps you can imagine what it is. All things must come to an end. 

I think you are confusing expat thinking with tourist thinking. As expats we have our finger somewhat on the pulse of what is happening here, a tourist from London, Paris, Berlin, couldn't care less about politics or the morality of their host countries leaders, they want sea, sun and fun for three weeks. Investors will park their money where it will give them a profit, they don't have to live here. The Baht is not only stable it is rising, large foreign reserves, good trade balance, infrastructure investment and the population is quiet, whether through fear or apathy doesn't matter, 'Pecunia non olet' (money doesn't stink) as the Roman emperor Vespasian once said. Money and tourists will graze where its quiet and the grass is green.

[Naam]

6 hours ago, spidermike007 said:

One positive outcome from all of this latest election news, will be that the country will likely become a pariah worldwide, and the baht could take a major hit. Not a good thing for the Thai people. But, for once, good news for ex-pats. 

keep on dreaming

[Naam]

10 minutes ago, soalbundy said:

I think you are confusing expat thinking with tourist thinking. As expats we have our finger somewhat on the pulse of what is happening here, a tourist from London, Paris, Berlin, couldn't care less about politics or the morality of their host countries leaders, they want sea, sun and fun for three weeks. Investors will park their money where it will give them a profit, they don't have to live here. The Baht is not only stable it is rising, large foreign reserves, good trade balance, infrastructure investment and the population is quiet, whether through fear or apathy doesn't matter, 'Pecunia non olet' (money doesn't stink) as the Roman emperor Vespasian once said. Money and tourists will graze where its quiet and the grass is green.