What the heck

[janclaes47]

The US$ seems to be on fire sale today.

 

Any explanation why the so big decline, which doesn't seem to have a floor, today?

Edited January 24, 2018 by ubonjoe
changed the profanity in the title to an acceptable word

[ubonjoe]

I only see a 14 satang change from yesterday's closing rate on the Bangkok Bank website. http://www.bangkokbank.com/BangkokBank/WebServices/Rates/Pages/FX_Rates.aspx

[janclaes47]

10 minutes ago, ubonjoe said:

I only see a 14 satang change from yesterday's closing rate on the Bangkok Bank website. http://www.bangkokbank.com/BangkokBank/WebServices/Rates/Pages/FX_Rates.aspx

 

I look at the mid market rates and it has gone from 31.85 to 31.63 now. That is 22 Satang or about 0.7%, which is a in my opinion a big difference in a single day.

[Boon Mee]

Ask the Central Bank here for an explanation and good luck! 

[laocowboy2]

If you tune into Bloomberg or CNBC you will see that the USD is weakening against most major currencies - especially the EUR and to a lesser extent the GBP as well. So it is not so much THB strength as USD 'weakness'. Currencies usually move on two factors - (anticipated) interest rate differentials and economic growth rates. With USD rates rising and EUR rates flat, the USD would normally see support from this. However with the EU economy showing much improved growth, the expectation is that EUR interest rates will also begin to rise before to long. So the interest differential should reduce. As for growth rates, the differential has already reduced.

[tonray]

One underlying reason is the expectation that the recent tax reform/cuts will add to the long term deficit. Increasing deficits weaken the currency's relative attractiveness.

[Suradit69]

Part of the problem is the anti global free- trade rhetoric coming out of Washington. Add to that Mnuchin's unprecedented comment from a Secretary of the Treasury [below].

 

On the other hand, the likelihood of higher interest rates forecast in the US, especially compared to other regions, will probably give some lift to the dollar eventually.

 

Quote

 

A weaker dollar is good for the US, Treasury Secretary Mnuchin says

• Treasury Secretary Steven Mnuchin said the U.S. is open for business and welcomed a weaker dollar, saying that it would benefit the country.

 

•  

https://www.cnbc.com/2018/01/24/a-weaker-dollar-is-good-for-the-us-treasury-secretary-mnuchin-says.html

 

Anyway, relative to the baht, over longer periods of time, it tends to be cyclical.

 

 

 

 

 

Edited January 24, 2018 by Suradit69

[wonder6281]

It's on a slippery slope and no brakes.  US Treasuries are heading the same way and once real inflation hits the US the Markets will follow suit. When all 3 are heading down prepare for the worst. 

[Koratjohn77]

I'm not sure what the OP is talking about I'm checking the currency conversion rates right now and everything seems to be the same as it has been for the past 3 years.  Sometimes it slightly fluctuates but the U.S. dollar vrs the Thai baht hasn't changed all that much in the past 8 years since I first began coming here.  

[janclaes47]

Just now, Koratjohn77 said:

I'm not sure what the OP is talking about I'm checking the currency conversion rates right now and everything seems to be the same as it has been for the past 3 years.  Sometimes it slightly fluctuates but the U.S. dollar vrs the Thai baht hasn't changed all that much in the past 8 years since I first began coming here.  

Really ?

 

You mean 36.04 in January 2016 is the same as 31.50 today.

 

Can I exchange some USD with you at the 2016 rate, if it's all the same for you?

[Lacessit]

A combination of factors - the quantitative easing AKA money printing, Trump tearing up free trade agreements, general pessimism about where he is taking the US.

[Different]

Yes stupid republicans, early 2016 one $ was 36 baht now it is 31, hope it doesn't fall down more than that.

Edited January 24, 2018 by Different

[Ruffian Dick]

The US is trying to discourage too many people from fleeing to LOS. Crafty.

[The manic]

8 hours ago, janclaes47 said:

 

I look at the mid market rates and it has gone from 31.85 to 31.63 now. That is 22 Satang or about 0.7%, which is a in my opinion a big difference in a single day.

If 0.7% is of such significance to you you should be so wealthy that it makes no difference. Have one less beer a week or one less whore a month. But the reason? Ask Soros!

[lannarebirth]

Maybe all the manufacturers who shipped their operations offshore will learn the lesson that car manufacturers learned long ago, it is good to have a substantial amount of your manufacturing capacity in the country (currency) of your greatest number of consumers. Good for America at this point in her history, if not for expats who haven't hedged their expenditures in the local currency.

[ToddinChonburi]

7 hours ago, janclaes47 said:

Really ?

 

You mean 36.04 in January 2016 is the same as 31.50 today.

 

Can I exchange some USD with you at the 2016 rate, if it's all the same for you?

36.04 was do to the weak baht.  Nothing about US.  Dollar

[ToddinChonburi]

The baht is getting stronger.

[ExpatOilWorker]

10 hours ago, tonray said:

One underlying reason is the expectation that the recent tax reform/cuts will add to the long term deficit. Increasing deficits weaken the currency's relative attractiveness.

The current government is spending like drunken sailors and adding 500 billion baht (20%) deficit to this years fiscal bill, so I guess there is more at play here.

Thai export increased 9.9 % YoY and tourist are dropping $40-50 billion in the lap of the BOT, adding even more strength to the mighty baht.

[Brunolem]

53 minutes ago, ExpatOilWorker said:

The current government is spending like drunken sailors and adding 500 billion baht (20%) deficit to this years fiscal bill, so I guess there is more at play here.

 

There is that.

 

There is also the fact that the current administration supports a weak dollar, as stated in other posts above.

 

But more importantly for the longer term, the dollar is losing ground as global reserve currency.

The Chinese, with the help of Russia, are hell bent on ending the domination of the USD.

More and more international deals are bypassing the USD, and China is putting a huge pressure on Saudi Arabia to accept the yuan in payment for its oil...that would be the death blow to the USD!

 

All this means that the USD may still have a long way to go...down...

 

As for the exchange rate with the baht, if my memory is good, in 1978 I got only 25 baht for a dollar...

 

[janclaes47]

3 hours ago, ToddinChonburi said:

The baht is getting stronger.

Then tell me why Euro and GBP are at the same time getting stronger, or at least don't decline .

[janclaes47]

1 hour ago, Brunolem said:

 

As for the exchange rate with the baht, if my memory is good, in 1978 I got only 25 baht for a dollar...

 

 

And it was the same for the next 19 years, but I'm sure I don't have to explain you why that was, and what happened in the 19th year.

[Suradit69]

12 hours ago, Koratjohn77 said:

I'm not sure what the OP is talking about I'm checking the currency conversion rates right now and everything seems to be the same as it has been for the past 3 years.  Sometimes it slightly fluctuates but the U.S. dollar vrs the Thai baht hasn't changed all that much in the past 8 years since I first began coming here.  

I'm not sure what you're talking about. Looking at the high and low over the past 5 years, it ranges from Baht 28.6 to Baht 36.5 to the dollar and even using  today's rate shown at Bangkok Bank at Baht 31.30 compared with the  high of Baht 36.50, that's a difference of Baht 5.20.

 

If you wanted to put Baht 800,000 in your Thai bank account for a retirement extension and did it either at the best rate (36.5) or the worst rate (28.6), it would cost you either $27,972 or   $21,918 and at today's rate (31.30) it would be $25.560.

 

For anyone living on a limited fixed income, those fluctuations are pretty significant, especially if your timing is bad ... and isn't it always.

 

 

Edited January 25, 2018 by Suradit69

[Brunolem]

1 hour ago, janclaes47 said:

 

And it was the same for the next 19 years, but I'm sure I don't have to explain you why that was, and what happened in the 19th year.

Sure...and in the early 00s, the exchange rate was around 44 baht for a dollar.

Historically the baht as it stands today is not that strong against the dollar, and there is still plenty of downside left.

After all, the Thai economy in 1978 was nothing compared to what it is today.

Thus, a dollar below 30 baht may well be expected...

 

[geisha]

BBC just announced that the dollar was on a three year low and it was going to help the US economy and encourage exports. 

[ToS2014]

19 hours ago, Suradit69 said:

Part of the problem is the anti global free- trade rhetoric coming out of Washington. Add to that Mnuchin's unprecedented comment from a Secretary of the Treasury [below].

 

On the other hand, the likelihood of higher interest rates forecast in the US, especially compared to other regions, will probably give some lift to the dollar eventually.

 

•  

https://www.cnbc.com/2018/01/24/a-weaker-dollar-is-good-for-the-us-treasury-secretary-mnuchin-says.html

 

Anyway, relative to the baht, over longer periods of time, it tends to be cyclical.

 

 

 

 

 

With such trade deficits, a weak dollar does bode well for the US in international trade.  Just 'hurts' us expats when the US economy actually grows without the Fed issuing QE I, II, & III.  But I may also be way off the mark as I am not an expert like others are.

 

Another part of the problem with the trade deficits were terrible trade deals.  We shall see.

[Brunolem]

7 minutes ago, ToS2014 said:

With such trade deficits, a weak dollar does bode well for the US in international trade. 

 

Another part of the problem with the trade deficits were terrible trade deals.  We shall see.

John Mauldin explained the reason for the trade deficits quite clearly in an article a few years ago.

 

Since the USD is the global reserve currency, it means that all other countries need to build reserves in USD if they want to be able to buy a number a products, especially oil, that have to be paid in USD.

 

Yet, because only the US prints USD, it means it has to "export" a lot of them to keep the system running...and in exchange for these "exports" it imports real goods...hence the chronic deficits...

 

Other than that, the consequence of a weak dollar, in the long run, is that the US will import inflation...which by the way is what it wants these days...

[sateuk]

Wow moaning about 1 baht less on the exchange rate. Pound has gone down from 70 to 43 baht and euro has gone from 50 to 37 baht since I been here but dollar has stayed between 28 and 36 baht!!!  Why all the fuss English and Europeans should be moaning! 

[oldhippy]

9 minutes ago, sateuk said:

Wow moaning about 1 baht less on the exchange rate. Pound has gone down from 70 to 43 baht and euro has gone from 50 to 37 baht since I been here but dollar has stayed between 28 and 36 baht!!!  Why all the fuss English and Europeans should be moaning! 

The euro at introduction was only 90 US cents. It climbed steadily.

 

At it's deepest point it was still 105 US cents, an appreciation with 12%.

At it's highest point it was 160 US cents, an appreciation with 38%.

It is now 124 US cents, an appreciation with 38%.

I am not complaining.

[janclaes47]

16 minutes ago, sateuk said:

Wow moaning about 1 baht less on the exchange rate. Pound has gone down from 70 to 43 baht and euro has gone from 50 to 37 baht since I been here but dollar has stayed between 28 and 36 baht!!!  Why all the fuss English and Europeans should be moaning! 

Did that also happen in a single day?

[janclaes47]

1 minute ago, oldhippy said:

The euro at introduction was only 90 US cents. It climbed steadily.

 

The rate at introduction was 1.1795

 

https://www.eurusd.co/history.html