Forecast For The Baht

[topfield]

Surely the solution to the current dillema of the strong baht is very straightforward .

Do as Switzerland ( in particular) , Japan and Singapore have done . Reduce interest rates to a level so low that it is uneconomic for speculators and indeed nonspeculators to hang on to the currency.

At the moment its a one way bet for say UK expats. They can buy their baht at a discount [some would say a gift ] from the BOT of four baht per pound . the onshore rate being 68 the offshore rate being 64.

Then once they have their baht they can get around 4% interest on them so will hang on to their baht .

Were the BOT to slash interest rates to one percent what would the effect be both on the Thai economy and the currency ?

My answer/opinion ...and it would be interesting to read the answer of others especially sonic dragon and Dr Naam distinguished currency experts on this forum....is

1. the baht (offshore rate) will drop immediately possibly to 35 .the level of the onshore rate and over the following months to 38. Why ? Because few people will want to hold baht at an interest rate of one percent if they can get 5 + with dollars and pounds .

2. With bank loans available at such low rates many existing businesses will expand and many new businesses will take off. The need for staff will result in a steady lowering of the unemployment rate.

In a nutshell the Thai economy will start to flourish

Do others agree or disagree with this assessment of what will happen if interest rates were slashed ?

[samran]

Some of the cleverest people in the world sit at trading desks in banks and hedge funds thinking about things like this all day. If it really were possible to make significant profits doing this, then a wall of money would suddenly be trying to do it, which would immediately close the arbitrage to a level where only transaction cost and timing/market/legal risks are compensated.

all said! any further discussion how to make money by transferring "in/out" of Thailand is nothing but a waste time.

I've got a mate who sits around in London, earning oodles of cash, programing trading platforms at can identify arbitrages in the market. Not just currencies, but interest rates and other financial instruments. We are talking programming in efficencies of seconds (sometimes) that improve a banks ability to cash in on an arbtrage, or at least identify them for the traders to work their magic.

He is one of the smartest and quickest people you will ever meet, able to do complex equations in his head while we mere mortals sit around trying to figure out what a 'swaption' is.

[Old Man River]

Surely the solution to the current dillema of the strong baht is very straightforward .

Do as Switzerland ( in particular) , Japan and Singapore have done . Reduce interest rates to a level so low that it is uneconomic for speculators and indeed nonspeculators to hang on to the currency.

At the moment its a one way bet for say UK expats. They can buy their baht at a discount [some would say a gift ] from the BOT of four baht per pound . the onshore rate being 68 the offshore rate being 64.

Then once they have their baht they can get around 4% interest on them so will hang on to their baht .

Were the BOT to slash interest rates to one percent what would the effect be both on the Thai economy and the currency ?

My answer/opinion ...and it would be interesting to read the answer of others especially sonic dragon and Dr Naam distinguished currency experts on this forum....is

1. the baht (offshore rate) will drop immediately possibly to 35 .the level of the onshore rate and over the following months to 38. Why ? Because few people will want to hold baht at an interest rate of one percent if they can get 5 + with dollars and pounds .

2. With bank loans available at such low rates many existing businesses will expand and many new businesses will take off. The need for staff will result in a steady lowering of the unemployment rate.

In a nutshell the Thai economy will start to flourish

Do others agree or disagree with this assessment of what will happen if interest rates were slashed ?

As I wrote yesterday on another thread, slashing interest rates by 2% or more (to zero if need be) is one of the suggestions being made by Korn Chatikavanij. It was reported in an article he wrote in Tuesday's Bangkok Post. Korn is Dep. Secretary General of the Democratic party and (in my view) one of the real financial experts in Thailand, maybe the best. As you state that would not only lead to a weakening THB vis a vis the USD, but also help spur on a weakening economy. It does appear to be the way to go.

[bendix]

And it is certainly on the cards and being considered in the corridors of power. With inflation relatively low and economic growth forecast to be a bit sluggish, the BOT sees little downside risk in cutting rates steadily over the next six months.

Watch this space.

[LivinLOS]

As I have been predicting, Asian currencies, in relation to USD, were going to appreciate and that's exactly what's been happening. The Thai Baht isn't going to weaken against USD anytime soon. It's either going to stay right where it's at or continue to get stronger even. The US deficits are a mess and the US needs at least 75 billion a month of incoming foreign money to finance these deficits. They aren't getting it. So one of two things needs to happen for the US to be able to deal with this. Either the Fed has to raise interest rates, which they won't do with all the sub prime lending trouble going on right now, or USD has to weaken. You can guess which one of two is happening. The writing has been on the wall for a long time. Until the US gets the deficits under control, USD won't be able to maintain any strength. That's the bottom line.

Short and to the point.. Nothing new that hasnt been said many times here over the last couple of years while dollar bulls keep saying all will be fine the world needs the dollar too much etc..

My only surprise is that there isnt more of a flight to quality and risk appreciation out there..

[Temporaneo]

He gave examples on his show how big money could be made transfering funds back and forth between Thailand and Singapore. This would spell the death knell for the dual rate system ...

I asked my bank in Thailand if I could swift THB out of country. The answer was no.

Thought I could take out cash , 500,000 THB to a neighbouring country and then to Singapore.

I have two bank accounts there. Asked both if I could open a THB account. Both answered no.

Checked the moneychangers and the exchange rate for THB was the on-shore one (less of course about 2% implicit commission)

Looked at the websites of banks in bordering countries, like ANZ Royal in Cambodia and found out that the exchange rates offered for THB notes are the on shore if you sell and the off-shore if you buy.

So I really wonder how you can profit from this off-shore rate if there is no way to get it.

[sonicdragon]

Surely the solution to the current dillema of the strong baht is very straightforward .

Do as Switzerland ( in particular) , Japan and Singapore have done . Reduce interest rates to a level so low that it is uneconomic for speculators and indeed nonspeculators to hang on to the currency.

At the moment its a one way bet for say UK expats. They can buy their baht at a discount [some would say a gift ] from the BOT of four baht per pound . the onshore rate being 68 the offshore rate being 64.

Then once they have their baht they can get around 4% interest on them so will hang on to their baht .

Were the BOT to slash interest rates to one percent what would the effect be both on the Thai economy and the currency ?

My answer/opinion ...and it would be interesting to read the answer of others especially sonic dragon and Dr Naam distinguished currency experts on this forum....is

1. the baht (offshore rate) will drop immediately possibly to 35 .the level of the onshore rate and over the following months to 38. Why ? Because few people will want to hold baht at an interest rate of one percent if they can get 5 + with dollars and pounds .

2. With bank loans available at such low rates many existing businesses will expand and many new businesses will take off. The need for staff will result in a steady lowering of the unemployment rate.

In a nutshell the Thai economy will start to flourish

Do others agree or disagree with this assessment of what will happen if interest rates were slashed ?

A very complicated question indeed !! Books have been written on the subject !

Very generally, I think that extreme caution is needed when considering a radical policy action such as a cut in interest rates to 1%. It could have some very unfavourable consequences. To a large extent it depends on what the goal is. If it was to simply to weaken the baht, I imagine that it would succeed, at least temporarily. But remember, that investors don't buy the baht just because of a 4% interest rate - they buy it to invest in assets that they think will appreciate - that being said it will reduce the demand for the currency. If the policy goal was also to remove the onshore/offshore disparity, it would probably fail. Local banks have been banned from engaging in forward transactions to trade the baht with foreign banks. This combined with the december capital controls creates the offshore/onshore disparity - and that will still remain with lower rates. Cutting interest rates to 1% would lead to a weakening of the baht both onshore and offshore.

In the current scenario of 4-5% GDP growth, 4.5%/2.5% headline/core inflation, a 1% interest rate could stoke inflation, create a domestic credit bubble which in turn would lead to asset price bubbles in real estate and general mis-allocation of capital (all of which could eventually lead to dire economic consequencies down the road). This reflects the fact that interest rates are normally used as a (blunt) tool to control inflation - not as a tool to control the value of the currency. I don't think comparisons with japan, switzerland and singapore are appropriate for a variety of reasons - economic, structural and developmental.

Central banks usually don't engage in radical policy changes because the effects are very hard to anticipate. Recen experience in Thailand shows this quite clearly. What they like to see are gradual changes in the things that concern them.

The above being said, I do think that a gradual lowering of interest rates in Thailand is a distinct possibility. The government will be cautious.

[think_too_mut]

Central banks usually don't engage in radical policy changes because the effects are very hard to anticipate. Recen experience in Thailand shows this quite clearly. What they like to see are gradual changes in the things that concern them.

Sorry, what is a concern of the people that make decisions, carry guns and have never been elected?

[sonicdragon]

Central banks usually don't engage in radical policy changes because the effects are very hard to anticipate. Recen experience in Thailand shows this quite clearly. What they like to see are gradual changes in the things that concern them.

Sorry, what is a concern of the people that make decisions, carry guns and have never been elected?

Um, while it's true that Ms Watanagase was not elected (most central bank governors around the world are appointed ), I'm not sure that I've seen her carrying a gun. I imagine that her bodyguards do though. If you are implying that it's the generals who are making policy decisions, some of the things might concern them are: crashes in the stock-market wiping out their investments; their ill-gotten funds on deposit suddenly getting more/less interest; their loans suddenly costing more/less to service; their foreign assets suddenly becoming worth significantly more/less due to movements in the baht, unrest among the people caused by economic distress. Strangely enough, the same kinds of concerns that elected politicians have. Even the generals like to keep the status quo - possibly even more so than economists and elected politicians.

Edited March 15, 2007 by sonicdragon

[think_too_mut]

Central banks usually don't engage in radical policy changes because the effects are very hard to anticipate. Recen experience in Thailand shows this quite clearly. What they like to see are gradual changes in the things that concern them.

Sorry, what is a concern of the people that make decisions, carry guns and have never been elected?

Um, while it's true that Ms Watanagase was not elected (most central bank governors around the world are appointed ), I'm not sure that I've seen her carrying a gun. I imagine that her bodyguards do though. If you are implying that it's the generals who are making policy decisions, some of the things might concern them are: crashes in the stock-market wiping out their investments; their ill-gotten funds on deposit suddenly getting more/less interest; their loans suddenly costing more/less to service; their foreign assets suddenly becoming worth significantly more/less due to movements in the baht, unrest among the people caused by economic distress. Strangely enough, the same kinds of concerns that elected politicians have. Even the generals like to keep the status quo - possibly even more so than economists and elected politicians.

I might argue with you.

The generals have no idea what they are doing when it comes to the money and business.

Just look at their mishaps.

Their Devakula primadonna would be good to wash dishes in pubs anywhere in the farang world.

But he has resigned. What a drama.

[Naam]

The writing has been on the wall for a long time.

yep! i'd like to live long enough to encounter another 30 years of "writing on the wall", yet statistics are against me.

[sonicdragon]

Central banks usually don't engage in radical policy changes because the effects are very hard to anticipate. Recen experience in Thailand shows this quite clearly. What they like to see are gradual changes in the things that concern them.

Sorry, what is a concern of the people that make decisions, carry guns and have never been elected?

Um, while it's true that Ms Watanagase was not elected (most central bank governors around the world are appointed ), I'm not sure that I've seen her carrying a gun. I imagine that her bodyguards do though. If you are implying that it's the generals who are making policy decisions, some of the things might concern them are: crashes in the stock-market wiping out their investments; their ill-gotten funds on deposit suddenly getting more/less interest; their loans suddenly costing more/less to service; their foreign assets suddenly becoming worth significantly more/less due to movements in the baht, unrest among the people caused by economic distress. Strangely enough, the same kinds of concerns that elected politicians have. Even the generals like to keep the status quo - possibly even more so than economists and elected politicians.

I might argue with you.

The generals have no idea what they are doing when it comes to the money and business.

Just look at their mishaps.

Their Devakula primadonna would be good to wash dishes in pubs anywhere in the farang world.

But he has resigned. What a drama.

No need to argue ! Sorry if it came accross wrong, but I was not saying that they know what they are doing ! I was simply trying to say that they have their own concerns about the economy, and some of those concerns are similar to those of elected politicians. It was just a retort to the previous poster who seemed to disagree with my assertion that central bankers like to do things gradually wherever possible.

[bingobongo]

it will get worse as BOT is forced to cut rates thereby increasing inflation and pay raises are nonexistent

PAY INCREASES

Thais slip behind rest of Southeast Asia

However, Thai professionals are expected to lag behind. Pay rises after inflation will range from 1.9-2 per cent, lower than the Philippines' 1.5-2.5 per cent and Hong Kong's 2.2-2.5 per cent.

http://www.nationmultimedia.com/2007/03/16...al_30029439.php

[TRIPxCORE]

The writing has been on the wall for a long time.

yep! i'd like to live long enough to encounter another 30 years of "writing on the wall", yet statistics are against me.

My statement was totally accurate.

[Naam]

The writing has been on the wall for a long time.

yep! i'd like to live long enough to encounter another 30 years of "writing on the wall", yet statistics are against me.

My statement was totally accurate.

i am not challenging your statement "TRIP" but just stating an accurate fact from my experience. since i made my first considerable amount of money and started investing (~30 years ago) i am hearing "the dollar is doomed".

[palm]

I am no whiz kid on this subject but I think that sooner or later the Bank of Thailand (Central Bank) will run out of money to buy up dollars in an effort to weaken the Baht. When the money runs out, market forces will take over.

--

Maestro

a central bank can never run out of money Maestro (as long as it is 'domestic' money).

Or, they can just do what Herr Mugabe has done in Zimbabwe...print more money!

. . . and the USA

[Naam]

The writing has been on the wall for a long time.

yep! i'd like to live long enough to encounter another 30 years of "writing on the wall", yet statistics are against me.

My statement was totally accurate.

i am not challenging your statement "TRIP" but just stating an accurate fact from my experience. since i made my first considerable amount of money and started investing (~30 years ago) i am hearing "the dollar is doomed".

when talking about dollar weakness let's post some facts:

-32 years ago (march 1975) one british pound bought 2.4179 us-dollar, today it buys $ 1.9375 but nobody talks about GBP weakness.

-during the same above-mentioned period the dollar lost until today vs. the deutsche mark 16% that's linear 0.5% per annum but dollar fans could cash in a yield difference of approximately 4% per annum not to mention the hundred times better possibilities for dollar investments.

it is the bottom line that counts! i am (for the umteenth time) stressing the fact that i am far from being a dollar bull. but as a global investor there is no way for me to bypass the opportunities the dollar provides, especially when a huge variety of instruments is available to hedge my exposure.

[Naam]

more facts about the doomed dollar (unfortunately database only for different periods available):

USD / AUD Jan 1991 1.2826

USD / AUD Mar 2007 1.2801

USD / CAD Jan 1980 1.16400

USD / CAD Mar 2007 1.17479

USD / THB Jan 1993 25.517

USD / THB Mar 2007 33.095

on a long term basis JP¥ appreciated vs. USD considerably but not during the last 15 years when the growling of the dollar bears increased every year:

USD / JP¥ Mar 1993 116.969

USD / JP¥ Mar 2007 116.989

[Old Man River]

I am no whiz kid on this subject but I think that sooner or later the Bank of Thailand (Central Bank) will run out of money to buy up dollars in an effort to weaken the Baht. When the money runs out, market forces will take over.

--

Maestro

a central bank can never run out of money Maestro (as long as it is 'domestic' money).

Exactly. Only when defending a currency against devaluation can the the central bank run out of money.

They can (and will) always print more local currency. The Fed has been doing it for decades.

The BOT raises THB in the capital markets, same way the Fed does it.

that's the "normal" way. if the BOT (or any other central bank) runs out of money the printing presses are started. that goes for the FED in USA too where the printing goes on since years and that's the reason why since last year no M3 figures are published anymore.

thank you Benjamin Shalom Bernanke!

As it relates to the US, I forgot about Bernanke's hiding numbers. The way the BOT does it is to first print money and then refinance their needs in the capital markets (sometimes referred to as sterilizing its liquidity).

[Naam]

As it relates to the US, I forgot about Bernanke's hiding numbers. The way the BOT does it is to first print money and then refinance their needs in the capital markets (sometimes referred to as sterilizing its liquidity).

bullseye!

[Pilchard]

I don't want to start a new thread for this so hope some one can slip an answer in here quick for me.

What is the onshore and offshore Baht / Sterling rate today 16 feb 07.

Tried to google this and now getting very confused.

Any help much appreciated, cheers

[TRIPxCORE]

The writing has been on the wall for a long time.

yep! i'd like to live long enough to encounter another 30 years of "writing on the wall", yet statistics are against me.

My statement was totally accurate.

i am not challenging your statement "TRIP" but just stating an accurate fact from my experience. since i made my first considerable amount of money and started investing (~30 years ago) i am hearing "the dollar is doomed".

I never said for one second that dollar doom was going to be a permanent move. All currencies go up and down. Ever since Bush has been in office in the U.S., USD was doomed to fall. With Bush blowing billions of dollars on the Iraqi War and our twin deficits reaching enormous levels during his tenure, this was all dollar negative. Everyone knew Bush would go into Iraq before he announced it. Then the deficit problem has been going on in the U.S. since at least 2002. Those two things were the "writing on the wall" I was referring to. USD is in for more hard times ahead but these moves will by no means be permanent. Now the housing problem and possible recession in the U.S. economy brings more negative sentiment upon the U.S.

[topfield]

I don't want to start a new thread for this so hope some one can slip an answer in here quick for me.

What is the onshore and offshore Baht / Sterling rate today 16 feb 07.

Tried to google this and now getting very confused.

Any help much appreciated, cheers

I think it more useful to explain how you get the rates at any time !

1. offshore :http://www.bloomberg.com/markets/index.html?Intro=intro_markets

2. onshore :http://www.cb.ktb.co.th/prod/bishis.nsf

Cheers

[ray23]

"OVERDRIVE

Stronger medicine needed to curb the rise of the baht

The baht yesterday broke the Bt35/US dollar level to hit Bt34.99 for the first time in nine years, as exporters rushed to convert dollars into baht.

This happened even before Dr Chalongphob Sussangkarn, the finance minister, was able to meet Tarisa Watanagase, the Bank of Thailand governor, to discuss the currency crisis and macro-economic direction.

Chalongphob faces a tough test over how to halt the rise of the baht, which is harming the competitiveness of Thai exports. One major rice trader has complained that if the baht were to go up to Bt32/dollar, he would no longer be able to compete in the world market. But already the offshore baht is trading at Bt32-Bt33.

A stronger baht is not good for importers either. A jewellery trader has complained that importers have bought materials from overseas at Bt36-Bt38/dollar and will now stand to lose money if they have to sell their goods at Bt35/dollar. A financial executive has told me that Thai businesses have been operating at near capacity for several years and have yet to upgrade their equipment through new investment. Without new investment, they will soon not be able to compete with neighbouring countries. But even if they were to invest in new machinery and equipment, would they be able to compete with China or Vietnam? And what will happen if the baht keeps on rising like this?

The financial markets are also monitoring Chalongphob's view on interest rates. There are now three schools of thought on Thai interest rates. The Finance Ministry's Fiscal Policy Office has suggested a radical policy, calling for bank authorities to cut the policy rate outright by one full percentage point to save the economy and to deter baht appreciation. This comes at a time when domestic demand is getting weak, credit growth is slower, inflation is increasing and money supply growth is falling.

A report by HSBC Global Research (March 14, 2007) has urged the banking authorities to adopt a middle path by raising the policy rate by 50 basis points at the next meeting of the Monetary Policy Committee on April 11. But eventually, the banking authorities will have no choice but to cut rates steeply this year in order to cushion the weakening economy. We can see the policy rate going down to 3.50 per cent this year, according to HSBC Global Research.

A report by CitiGroup Global Markets (March 13, 2007) has advocated an incremental policy - the stance the authorities are now taking - by calling for the rate to be cut by 25 basis points at a time. After the banking authorities have cut the rate by another 25 basis points to a cumulative 50 basis points, then they can re-evaluate to see whether they are on track in inflation targeting.

We are not sure which school of thought Chalongphob belongs to when it comes to interest-rate policy. However, he has the daunting task of salvaging the economy. There is a big risk that the Thai growth rate might slip below 4 per cent this year. Still, the government is projecting a growth rate of between 4.2 and 4.5 per cent, banking on fiscal stimulus to come to the rescue, although government spending is always slow to come, due to red tape.

A regional analyst from Hong Kong is not happy with the Thai situation, telling me the government should admit that the economy is going to be weak this year. Instead of projecting an ambitious and unrealistic growth rate, the government should revise the figure down and work on a new lower target, he said. If it fails to achieve the forecast, the interim government would face another credibility problem, he added.

The situation looks funny now. While we are facing a weak economy, the currency keeps on climbing. But this can be explained by strong external demand, which is the main driver of the Thai economy at the moment. The baht has become stronger, not because of portfolio inflows but because exporters are converting their surplus dollars into baht.

Fresh after his appointment as finance minister, Chalongphob, who has spent most of his career as an academic, might not want to rock the boat. There was no exciting news emanating from his meeting with Tarisa yesterday. First, Chalongphob will not interfere with the Bank of Thailand's affairs. Second, the capital controls will be maintained, depending on the further judgement of the banking authorities. Finally, the central bank will have full independence to manage its interest rate policy. Let's see how the Monetary Policy Committee will act at its April 11 meeting. Already, financial markets are speculating the central bank will cut the rate and remove the 30-per-cent reserve requirement, which has already been rendered obsolete anyway.

But the bigger question remains unchanged: How can Thailand move up the value-added chain in its economic development? Cutting rates deeply and removing capital controls only represent a small step ahead. Standard & Poor's ("East Asian Reserves Are Squeezing Out Monetary Options", Jan 29, 2007) foresaw a constraint on East Asian countries' capacity to intervene in foreign exchange markets to halt a rise in their currencies. Monetary policymaking has got complicated. Some central banks have lost heavily on the marginal holdings of their foreign exchange reserves. The Bank of Thailand has lost Bt300 billion alone from its foreign exchange interventions, including the cost of issuing bonds to sterilise liquidity from its monetary injections.

Standard & Poor's recommends that in the medium term, governments, including Thailand, ease constraints on monetary flexibility by introducing greater domestic competition in the non-trade sector, liberalising business regulations and promoting deeper domestic capital markets. So, we're back to the same question: how to improve the competitiveness of the country as a whole.

Thanong Khanthong

The Nation"

[Naam]

"...the deficit problem has been going on in the U.S. since at least 2002. Those two things were the "writing on the wall" I was referring to."

------

the deficit problem (trade balance and budget deficit) did not start in 2002 but has been going on since the war in Viet Nam ended. that was ~32 years ago and since then @n@l-ysts and gurus are writing on the wall that the dollar is doomed.

i don't really mind their teachings and prophecies as they have no impact on my (not so) humble self making money. not inspite but BECAUSE of these teachings.

[bingobongo]

Thailand Scraps Capital Controls; Investors Skeptical

``The mirror's cracked,'' Vickers said. ``People are always going to be skeptical of the military government. It's safe to do business in Thailand but our advice is to wait and watch.''

http://www.bloomberg.com/apps/news?pid=206...&refer=asia

[sonicdragon]

Why is everyone here so concerned about a stong baht ? It's s rhetorical question - no need to answer. Next question - why is the government/BoT concerned about it ? Another rhetorical question. There will always be groups in the economy that want a weaker/stronger baht. In the grand scheme of things, the baht is not very strong. Ignoring the offshore rate (see my earlier post) , we are basically 10% higher than where the majority of people seemed to be comfortable. So what !!! 10% is nothing ! And that is during a period of general $ weakness. Look at what the Yen did during japan's export-led boom in the 60s-80s (+200%+++). Look at what the Euro has done in the last 6 years (+ ~50%) - yes, some groups in some parts of the eurozone are not happy about it, but euroland is doing quite nicely, all things considered. The $ was a strong currency for most of the 90s and into the 00s. Although Thailand is very different from these economies, and I do thing that a slightly weaker baht would be good on balance I don't believe that radical policies such as large negative real interest rates are going result in a desirable outcome. The real, long term, solution lies in improving the structural weaknesses in the economy such as education, institutionalised corruption, democratic reforms (any kind of democracy would be a start!) etc.

At the end of the day, money goes where it wants to - where it "thinks" (righly or wrongly) that things are cheap. It's a very difficult thing to try to stop that. You don't build a dam without thinking very seriously about all kinds of consequences - and even when you have thought of "everything", even if you build it right, there is often some side effect that no one saw coming. IMHO economics is in its infancy - it is very poorly understood. That is why there is so little consensus among the "experts". I sometimes think an interesting comparison to economics these days is with medical science 100 and more years ago. Anyway, I digress.

A final point for now.....people need to be careful what they wish for. Financial markets are very fickle and not nearly as efficient as many people would have you believe IMHO. Things might look very different indeed a few months down the road when the elections are looming.

[sonicdragon]

On the subject of the US$, it's interesting to note that there has been more consensus on the doomed outlook for the $ than almost anything else in macroeconomics/finance over the last few years.

Economic history shows that big shocks to the system usually occur when there is very little consensus.

Conventional economic thinking tells you that the $ is doomed - basically because of the twin deficits. But the conventional wisdom doesn't allow for the fact that the USA dwarfs every other country, with a bigger GDP than the next 4 biggest economies combined, and 28% of the world total. The USA has no foreign currency debt. Foreign central banks hold huge amounts of $. It's in no ones interests for there to be collapse in the $. If it looked even remotely likely there would be concerted coordinated intervention by all the major central banks. This of course does not mean that the $ cannot fall. A gradual weakening against the Yuan and Yen would be welcomed. But it has already fallen a lot against the Euro.

It should also be obvious that a strengthening Yuan would put upward pressure on the baht.

[Pilchard]

I don't want to start a new thread for this so hope some one can slip an answer in here quick for me.

What is the onshore and offshore Baht / Sterling rate today 16 feb 07.

Tried to google this and now getting very confused.

Any help much appreciated, cheers

I think it more useful to explain how you get the rates at any time !

1. offshore :http://www.bloomberg.com/markets/index.html?Intro=intro_markets

2. onshore :http://www.cb.ktb.co.th/prod/bishis.nsf

Cheers

Thank you Topfeild, spot on

[Gary A]

Get real and think about it. The US government is quite happy with a weak dollar. All their debts are discounted and the only people who suffer are expats like me. People living in the US can only see the cheap Chinese and other imported products going up in price while the products made in the USA have not gone up at all. A weak dollar is good for the USA.