The Baht Goes Crazy

[Naam]

US $ down to 32.53 baht,where is the bottom?

Well, the offshore rate fell below 32 last week, so perhaps it's found it already and we didnt notice.

Baht also seems to have weakened marginally against the Aussie and Kiwi this week too.

a picture tells more than 10,000 words:

[ray23]

OK color me very confused the dollar makes gains against the Euro, but looses agianst the baht. I just can not find any lgoic in this?

Dollar Rises as U.S. Employers Added More Jobs Than Forecast

By Ye Xie and Bo Nielsen

April 6 (Bloomberg) -- The dollar rose from a two-year low against the euro after a U.S. government report showed employers added more jobs last month than economists forecast and the unemployment rate fell to 4.4 percent.

The U.S. currency advanced as the employment data led traders to reduce bets that the Federal Reserve will cut borrowing costs in the third quarter.

``It was a very strong number, and after yesterday's move it surprised a lot of people,'' said Camilla Sutton, a currency strategist in Toronto at Scotia Capital Inc. ``It switches things around, and we can see a stronger dollar for a while.''

The dollar rose 0.37 percent to $1.3379 per euro at 8:47 a.m. in New York. The dollar yesterday fell to $1.3442, the lowest since March 2005. The dollar rose 0.44 percent to 119.27 yen. The euro rose to 159.58 yen, after touching 159.69, an all- time high.

Markets in the U.S., the U.K., Hong Kong, Singapore and Australia are closed today for Good Friday.

U.S. employers added 180,000 non-farm jobs in March, following a revised gain of 113,000 the previous month, the Labor Department said today in Washington. The median forecast of 75 economists surveyed by Bloomberg News was for an increase of 130,000 jobs. The unemployment rate had been forecast to rise to 4.6 percent.

Interest rate futures suggest a 35 percent likelihood the Fed will cut its target rate for overnight lending between banks to 5 percent at its Aug. 6-7 meeting, down from 52 percent odds before the jobs report. As recently as March 13, the market was certain of an August rate cut.

Fed's Inflation Gauge

An inflation measure closely tracked by the Federal Reserve gained in February, the Commerce Department reported March 30. The price gauge, tied to spending patterns and excluding food and energy costs, rose 2.4 percent from February 2006 after rising 2.2 percent in January from a year earlier.

St. Louis Federal Reserve Bank President William Poole, speaking in New York on April 2, said he would face a ``high hurdle'' for favoring interest-rate cuts if inflation stays near the current pace. He reiterated that his goal for annual inflation is 1.5 percent, plus or minus 0.5 percentage point.

The Fed has kept its target rate for overnight lending between banks at 5.25 percent since August.

To contact the reporters on this story: Ye Xie in New York at [email protected] ; Bo Nielsen in New York [email protected]

[LaoPo]

OK color me very confused the dollar makes gains against the Euro, but looses agianst the baht. I just can not find any lgoic in this?

Dollar Rises as U.S. Employers Added More Jobs Than Forecast

By Ye Xie and Bo Nielsen

April 6 (Bloomberg) -- The dollar rose from a two-year low against the euro after a U.S. government report showed employers added more jobs last month than economists forecast and the unemployment rate fell to 4.4 percent.

The U.S. currency advanced as the employment data led traders to reduce bets that the Federal Reserve will cut borrowing costs in the third quarter.

``It was a very strong number, and after yesterday's move it surprised a lot of people,'' said Camilla Sutton, a currency strategist in Toronto at Scotia Capital Inc. ``It switches things around, and we can see a stronger dollar for a while.''

The dollar rose 0.37 percent to $1.3379 per euro at 8:47 a.m. in New York. The dollar yesterday fell to $1.3442, the lowest since March 2005. The dollar rose 0.44 percent to 119.27 yen. The euro rose to 159.58 yen, after touching 159.69, an all- time high.

Markets in the U.S., the U.K., Hong Kong, Singapore and Australia are closed today for Good Friday.

U.S. employers added 180,000 non-farm jobs in March, following a revised gain of 113,000 the previous month, the Labor Department said today in Washington. The median forecast of 75 economists surveyed by Bloomberg News was for an increase of 130,000 jobs. The unemployment rate had been forecast to rise to 4.6 percent.

Interest rate futures suggest a 35 percent likelihood the Fed will cut its target rate for overnight lending between banks to 5 percent at its Aug. 6-7 meeting, down from 52 percent odds before the jobs report. As recently as March 13, the market was certain of an August rate cut.

Fed's Inflation Gauge

An inflation measure closely tracked by the Federal Reserve gained in February, the Commerce Department reported March 30. The price gauge, tied to spending patterns and excluding food and energy costs, rose 2.4 percent from February 2006 after rising 2.2 percent in January from a year earlier.

St. Louis Federal Reserve Bank President William Poole, speaking in New York on April 2, said he would face a ``high hurdle'' for favoring interest-rate cuts if inflation stays near the current pace. He reiterated that his goal for annual inflation is 1.5 percent, plus or minus 0.5 percentage point.

The Fed has kept its target rate for overnight lending between banks at 5.25 percent since August.

To contact the reporters on this story: Ye Xie in New York at [email protected] ; Bo Nielsen in New York [email protected]

The US$ gaining against the Euro ?

The Charts show the EURO versus US$, meaning the Euro is going UP in the charts.

One Month

Three Months

Twelve Months

Intra Day - Today the $ shows a little uptrend but just a bit.

LaoPo

Edited April 6, 2007 by LaoPo

[ray23]

You may be completly correct just following the Bloomberg article

[ray23]

How can a economy flourish with this kind of junk going on, this is just one of the incidents and it's not chump change. That is assuming that it did happen. If it did I didn't notice anyone getting really worried about it.

It would seem to me that the cost of doing business here was not exactly cheap before. Are there going to prices to pay in the future for the type of activity?

Or is it going to end up being business a usual? The bahts still going up.

From the Nation:

Politicians 'took Bt500m bribes for fire trucks deal'

Some politicians involved in the overpriced purchase of fire-fighting equipment for Bangkok flew to Singapore to collect Bt500 million in bribes, a member of the Interior Ministry panel investigating the scandal said yesterday.

"We are gathering evidence against the corrupt officials," the official said on condition of anonymity. He did not say how many politicians were bribed or when it happened.

The committee will tomorrow wrap up its probe into the Bt6.68-billion deal for fire trucks, fireboats and other equipment for the Bangkok Fire and Rescue De-

partment. Its results will be forwarded to Interior Minister Aree Wongsearaya before being released to the public in the next fortnight.

"Like other panels, we found the deal to be overpriced. However, on some points our results differ from what the Assets Examination Committee [AEC] found," the official said.

Earlier this year, the AEC concluded the deal was overpriced to the tune of Bt1.9 billion. It accused former interior minister Bhokin Bhalakula, his then-deputy Pracha Maleenont and then-assistant secretary Somsak Khun-ngern of corruption for their roles in the deal with an Austrian company.

The AEC also said there was evidence against former Bangkok governor Samak Sundaravej and the head of the fire department Police Maj-General Atilak Tanchukiat.

It found no evidence against incumbent governor Apirak Kosayodhin.

The member of the Interior Ministry's panel investigating the scandal said, "We have not ignored evidence against persons the AEC has not named as suspects."

Officials who had failed to co-operate in the probe will be named, the panel member said. Former Bangkok city clerk Khunying Nathanon Thavisin has already been identified as uncooperative.

"Although they are not corrupt they avoided giving information that could be useful," the official said.

Members of the police must take some responsibility for designing the specifications of the deal while Krung Thai Bank will face action for opening the letter of credit, he added.

The eight-person panel probing the scandal is chaired by Assoc Professor Veerapong Boonyopas, head of the business crime and money-laundering centre at Chulalongkorn University's Faculty of Law.

The deal can be traced back to 2004 when Bhokin, as interior minister, signed an agreement of understanding with the Austrian ambassador to purchase fire trucks, fireboats and other fire-fighting equipment.

Pracha and Somsak helped draft the agreement. Samak signed it just before his term ended.

Incumbent governor Apirak voiced concern but signed the letter of credit, without which the purchase could not have gone through, due to worries over legal repercussions and bilateral ties.

[Crash999]

Another important factor is China. If the US imposes tarrifs on low value added goods made in china, which is more than a remote possibility (in fact it has already started), this will make other asian economies exports much more attractive, which will put upward pressure on their respective currencies.

I doubt that the tariffs will be implemented as some are proposing, such as the flat 27.5% duty, as it would cause real inflation for the poorer folks in the US and would only benefit other regional Asian economies. Instead it'll likely be more 'antidumping' rulings where prodded by industry lobbyists targeting steel, food, and other specific industries that still have a US domestic base.

[backflip]

"The US$ gaining against the Euro? The Charts show the EURO versus US$, meaning the Euro is going UP in the charts."

And that's why many of the TV posters don't understand what is happening. If the THB goes from 36/USD to 34/USD, half of the TVers will say that the THB is strengthening, and the other half will claim that the THB is weakening.

[cmsally]

Just caught the end of an interview on BBC with a man from West Pac talking about the Thai economy.

Most of the discussion centred on interest rates and the not if but how much they would come down.

The cure all for kickstarting an economy supposedly.

According to him wouldn't affect the exchange rate as you would get some more foreign investmet - bit vague on that one although he thought people might jump into the equities market.

Round up was " what is your advice for investing in Thailand at the moment"

His reply " Avoid it".

Yes just 2 words!

He did elaborate a bit after to say that this was partly due to the fluidity of the financial rules at the moment.

[cclub75]

Just caught the end of an interview on BBC with a man from West Pac talking about the Thai economy.

Most of the discussion centred on interest rates and the not if but how much they would come down.

The cure all for kickstarting an economy supposedly.

According to him wouldn't affect the exchange rate as you would get some more foreign investmet

Well for the moment... he seems right.

Despites the 50 points cut of the BOT today... THB increased again and touched 32.20 tonight...

No effect.

"Play It Again Sam (Tarisa) !"

As for the hike in equity market... It's the traditionnal mistake. Investors see Thai market as a "normal" western style market. In the US you reduce rate, Dow Jone goes up. There is a perfect and immediate link.

But we could speak about Japan : rate at 0... and the japanese consummers never increased their spending for many years.

As for Thailand, the problem with domestic demand right now it's clearly not... the level of interest rates. It's... confidence. It's unstability. It's uncertainty.

If a thai individual think that next monday he's going to have :

-a coup

-a counter coup

-a liter of gasoline more expensive

-some bombings

-a new prime minister

-a new interview of Thaksin

-a THB versus USD at 30 or 40

-or the landing of a flying saucer coming from Mars

.... he's not going to take a loan to buy a house. Or to invest into a business. Period. At least, he could borrow some money... to get drunk. To forget his misery.

The guys at the BOT are dreaming. But the pressure of the stupid politicians was too high. "Cut ! Cut ! Cut ! Save us !".

[Huw]

Speaking of currencies... Do any GBP holders see anything to worry about in the negative divergances in the LT GBP chart?

http://stockcharts.com/h-sc/ui?s=$XBP...&a=79290890

If I understood it then maybe I would worry about it, but! My understanding is that GBP will fall against the Thai Baht (and other currencies) later this year.

I don't chart the GBP vs THB, only against the $USD. Nothing is cast in stone and indeed anything at all may happen, including a strong advance by the GBP. I'm only pointing out that this negative divergence exists and last time it did a really nasty correction ensued. Here's a definition of a negative divergence:

http://www.trade10.com/negative_divergence.htm

ttp://stockcharts.com/school/doku.php?id=...tive_divergence

I've checked this my Forex pal and he reckons that GBP will make one more push towards the magical USD 2.0 mark before topping out and predictably weakening - this is in line with market commentary for some time now that has suggested that GBP is overvalued and a correction is due. How that scenario stacks up against the future of the Thai Baht remains unclear and my chum cannot shed light on it since he can't get reliable data feeds right now - his data feeds are suggesting that THB fell 9% today so obviously not trustworthy. Be interested though to read what your take is on the charts.

From memory, the fibonacci level of the baht from its low in 1997/8 is about 32. In the long term, I suspect it is going to go south, the offshort price has been stalled at about the 32 level for a little while, I cant see it strengthening further, esp if the indicators from USA remain patchy or on the improve. I will be buying USD if the baht goes back over 34 offshore.

[Pattaya_Fox]

Discussion of moderation issues including individual cases is against the forum rules. In this case Rule no 5.

I have removed some posts and I would suggest to those who are not familiar with the forum rules to please read them.

[lannarebirth]

Speaking of currencies... Do any GBP holders see anything to worry about in the negative divergances in the LT GBP chart?

http://stockcharts.com/h-sc/ui?s=$XBP...&a=79290890

If I understood it then maybe I would worry about it, but! My understanding is that GBP will fall against the Thai Baht (and other currencies) later this year.

I don't chart the GBP vs THB, only against the $USD. Nothing is cast in stone and indeed anything at all may happen, including a strong advance by the GBP. I'm only pointing out that this negative divergence exists and last time it did a really nasty correction ensued. Here's a definition of a negative divergence:

http://www.trade10.com/negative_divergence.htm

ttp://stockcharts.com/school/doku.php?id=...tive_divergence

I think this is an idea whose time has come. Should know over the course of the next few business days. Anyhow, I'm short the GPB

[teejay]

Speaking of currencies... Do any GBP holders see anything to worry about in the negative divergances in the LT GBP chart?

http://stockcharts.com/h-sc/ui?s=$XBP...&a=79290890

If I understood it then maybe I would worry about it, but! My understanding is that GBP will fall against the Thai Baht (and other currencies) later this year.

I don't chart the GBP vs THB, only against the $USD. Nothing is cast in stone and indeed anything at all may happen, including a strong advance by the GBP. I'm only pointing out that this negative divergence exists and last time it did a really nasty correction ensued. Here's a definition of a negative divergence:

http://www.trade10.com/negative_divergence.htm

ttp://stockcharts.com/school/doku.php?id=...tive_divergence

I think this is an idea whose time has come. Should know over the course of the next few business days. Anyhow, I'm short the GPB

you're short the GBP against what currency?

[lannarebirth]

The $USD

[Naam]

you're short the GBP against what currency?

there is a way to short GBP or any currency against a whole bunch of other currencies. e.g. take a GBP loan and invest the amount in parts in other currencies. i have done that with JPY for a number of years, profited from carry and (quite important for me) diversified the risk.

the easiest way of course is selling forward against a single currency which makes it a breeze to get in and out again.