Thai baht to plummet ? Thailand worst hit

[samran]

Thailand runs a trade surplus. More people want the baht than don’t. 
 

Plus the BOT has reserves coming out of its eyeballs, it learnt the lessons of ‘97. 
 

Baht isn’t going to crash, no matter how much you dream it. 

[pineapple01]

If i speed read the topic i get Thai Baht to Plumber. My Norway Chum gets a shattering 3.5 Bht to his Krone..no wonder lockdown doesn't make much difference to him.

[Walker88]

Folks are not paying attention to the fallout from CV-19. The baht is likely in trouble long term, because CV-19 has forced countries to reassess their trade policies.

 

---Domestic employment is viewed more critically than when 'globalization' was all the rage

---CV-19 disrupted supply chains; countries will view domestic manufacturing as critical to national security

 

Export economies---Thailand is certainly one of these---and countries running current account surpluses will be hit hardest by what will be a collapse in global trade. FDI will stop. Countries like the US and EU nations will encourage domestic manufacturing, not outsourcing, and offer tax incentives to make up for the higher wage costs. Also, nations that innovate will try to capture more of the gains, rather than risk tech transfer or tech theft.

 

Countries whose primary input is merely cheap labor will be left out of the post-CV-19 world.

 

Little to no FDI, lower exports (US just cut Thailand's 'most favored nation' status), and no tourism (17.7% of Thai GDP in 2019, not even accounting for gray economy effects like the 'adult entertainment industry') are going to reduce both Thai GDP and tear into its current account and reserves.

 

Post-CV-19, the likely trend for the baht is to weaken, and it could turn into a rout, as the market remains loaded on the long side.

Edited April 27, 2020 by Walker88

[onekoolguy]

On 4/26/2020 at 8:44 AM, sucit said:

I expect the baht to get stronger against the dollar as they print money at unprecedented levels. This is just starting over there and they are talking about 2k checks for all citizens. 

 

I think if and when they start these longer term policies like this, the markets are going to wake up and finally realize the dollar is dead. 

 

idk exactly what will happen but the definition of inflation is more money in circulation, so it does not seem very good for good ol usa. 

You make a good point. The Potential inflation is crazy. But if you want safety of your capital where would you put it? Most of the countries that are considered safe have an economy that is too small to absorb large amounts of capital? And how much do you trust the government to keep your funds safe and available? If you look at it that way the choices are much smaller? This is why the dollar has remained strong in spite of high inflation!

[Walker88]

11 hours ago, samran said:

Thailand runs a trade surplus. More people want the baht than don’t. 
 

Plus the BOT has reserves coming out of its eyeballs, it learnt the lessons of ‘97. 
 

Baht isn’t going to crash, no matter how much you dream it. 

Yes, but that is all known and priced into the market.

 

None of those things is going to get better, and with the coming 'trade wars' or post-CV-19 shift toward shifting jobs and production back to domestic markets, those two things will only get worse for Thailand. Current account will tumble and likely go negative, and the reserves can be eaten up pretty quickly as, inter alia, loss-making Thai Airways needs to be bailed out, more people will need their 5000 baht/month, hotels will need bailing out as tourist arrivals evaporate, etc.

 

The market has priced in none of this.

Edited April 28, 2020 by Walker88

[smudger1951]

On 4/26/2020 at 2:56 AM, cornishcarlos said:

 

It's not the 2nd wave.. No restrictions have been eased, in fact they have become stricter.

The extra numbers are confined to worker dorms that are quarantined. Community cases are averaging about 10-30 per day over the past couple weeks..

 

Anyway, this is about the Baht !!

I'm with Cornishcarlos, OK !

[smudger1951]

While Thailand has done next to nothing supporting anyone during lockdown I would ask you all what price do you put on political stability. Currency markets prefer it.

[uli65]

they will never support the poor people, this regime is here to protect the rich

[Grumpy John]

On 4/26/2020 at 6:10 PM, Alidiver said:

The Thai manufacturing industry is based upon the Western economy. 

The tourist industry is decimated. 

All that's left is overpriced rice and rubber. 

Well as an Aussie reeling under the pressure of everyday retirement in LOS I have to say the rubber maybe over priced but one would hope it's made into condoms for use as we grab our ankles to get reamed at the money exchange counter!

[Walker88]

14 minutes ago, Grumpy John said:

Well as an Aussie reeling under the pressure of everyday retirement in LOS I have to say the rubber maybe over priced but one would hope it's made into condoms for use as we grab our ankles to get reamed at the money exchange counter!

If I'm pairs trading now, I want to be long Aussie vs baht and long USD vs baht, with a 5 year time horizon and looking for at least a 25-35% move. I expect dollar/baht to be mid 40s in 2 years and Aussie back around 25. Again, this is based on a view that countries will revert to self-sufficiency and domestic production, plus the fact the market has been wildly long the baht for a few years, so there's plenty of fuel to hit it as people try to exit the trade.

 

If you see 25 Aussie again, would you have to change your moniker from 'Grumpy'?

Edited April 28, 2020 by Walker88
was thinking kiwi too mutt!

[pineapple01]

I often wonder about lifes unfairness and why the Financial Wizards here are not posting in a Cayman Islands Visa type Forum from their Colonial Mansion.

[moe666]

Jeez do not you guys pay attention, the bhat has already started to strehgthen or the US dollar is getting weaker. A few weeks ago the dollar to bhat was at 32.91 there abouts almost 33.0 it is now down to 32.27. All this has come about as the US has borrowed or basicly printed money to cover all the hand outs and the multi million in tax cuts for rich people. Trump also has a known policy of a weaker dollar that is why he was constantly going on at the head of the Federal reserve to lower the rates several months ago. With the US going into a recession possible depression the interest rates will not be raised, no tourist from other countries to bring in foreigh currencies

[pineapple01]

2 hours ago, smudger1951 said:

I'm with Cornishcarlos, OK !

What part of S/pore you stuck in then.

[moe666]

2 minutes ago, pineapple01 said:

I often wonder about lifes unfairness and why the Financial Wizards here are not posting in a Cayman Islands Visa type Forum from their Colonial Mansion.

You do not have to be a wizard to be informed, just courious

[SidJames]

On 4/26/2020 at 6:20 PM, toofarnorth said:

I thought Cornwall was still quids.

They get paid in silver in Cornwall

[pineapple01]

34 minutes ago, moe666 said:

You do not have to be a wizard to be informed, just courious

But the informed turns into an expert here. Just to beat them dam Teacher Creatures  its  Cu not Co.????‍????

[Steve Vincent]

IMF was monitoring Thailand although they broke several laws nothing was done. Remember reading a article last year when the BOT explained they had the insight to purchase millions of dollars safeguarding the baht. Another factor is foreigners who’ve opened businesses ex pats living here have all put plenty into BOT better returns and in turn it’s allowed Thailand the freedom of moving money around to safeguard the baht. It’s that old adage,.if we all went to the bank tomorrow and withdrawn our money the banks they wouldn’t have the necessary funds available. That said with all the issues we’ve faced in the past months with covid19 & tourism losing billions along with businesses closing the baht has remained strong ! Sadly I’m not a economics expert and don’t have the answers as i thought the baht would have weakened well before now as I’ve seen it as high as 72 and as low as 36 

[pineapple01]

7 minutes ago, Steve Vincent said:

IMF was monitoring Thailand although they broke several laws nothing was done. Remember reading a article last year when the BOT explained they had the insight to purchase millions of dollars safeguarding the baht. Another factor is foreigners who’ve opened businesses ex pats living here have all put plenty into BOT better returns and in turn it’s allowed Thailand the freedom of moving money around to safeguard the baht. It’s that old adage,.if we all went to the bank tomorrow and withdrawn our money the banks they wouldn’t have the necessary funds available. That said with all the issues we’ve faced in the past months with covid19 & tourism losing billions along with businesses closing the baht has remained strong ! Sadly I’m not a economics expert and don’t have the answers as i thought the baht would have weakened well before now as I’ve seen it as high as 72 and as low as 36 

You must move in  Hi Places. If the Ferangs around here withdrew all their Money no one would notice. Diesel was 13 Bht a Litre when i came here, that shows inflation hurts trade for working folks.Their income hasn't kept pace with it.

[Walker88]

2 hours ago, moe666 said:

Jeez do not you guys pay attention, the bhat has already started to strehgthen or the US dollar is getting weaker. A few weeks ago the dollar to bhat was at 32.91 there abouts almost 33.0 it is now down to 32.27. All this has come about as the US has borrowed or basicly printed money to cover all the hand outs and the multi million in tax cuts for rich people. Trump also has a known policy of a weaker dollar that is why he was constantly going on at the head of the Federal reserve to lower the rates several months ago. With the US going into a recession possible depression the interest rates will not be raised, no tourist from other countries to bring in foreigh currencies

Let it breathe.

 

This is only the beginning. The after effects of CV-19 will be substantial, and will alter the economic balance of power. The baht's trend is now lower. FX trends tend to last years, and there is a lot of noise in the early stages of a trend change.

 

There is no secret as to what the US is doing regarding printing money. You must remember, however, that there is also a deflationary trend and the evaporation of bad debts, so the printing merely fills in holes.  Japan has been printing 24/7 since 1990, they have the highest debt relative to GDP in the world, the absolute worst tax revenue vs debt anywhere---with Greece being a way way way distant second---yet the yen strengthens. Japan also has the worst shortfall in their pension system (I used to manage money there and know the reality vs the myth; I also traded FX in large banks and hedge funds)----yet the yen strengthens.

 

There are a host of factors that drive FX rates. All of the 'good news' has been priced into the baht for a few years now, so it's likely to disappoint the longs as nations around the world cut back on trade and bring industries back inside their own borders.

 

If I see the baht get back into the range of 30.5 to 31 vs USD, I'll reassess the trade, but otherwise I'm short baht for the next 5 years.

[smudger1951]

Here in the UK the chancellor is funding millions of £ to help people and business get through lockdown. Meanwhile in Thailand business will never open again and empty stomachs and unpaid rent will raise fists eventually. What price does thr FX put on political stability ?

[SwissCheeseMan]

On 4/26/2020 at 11:01 AM, saakura said:

Dont get wet dreams. Going by the past, nothing affects teflon Thailand. 

No tourists going to Thailand for maybe 1 year or more.  I don't remember the Thailand tourism industry, and its economy, going through something like that in the past.  

 

Edited April 29, 2020 by SwissCheeseMan

[Leaver]

On 4/28/2020 at 6:24 PM, smudger1951 said:

Meanwhile in Thailand business will never open again and empty stomachs and unpaid rent will raise fists eventually. What price does thr FX put on political stability ?

They can just roll out the tanks again.  

 

The poorer Thai's have certainly been shown their place in Thai society by the Junta, and now this sham Thai government.  

[kingdong]

On 4/26/2020 at 3:13 AM, theoldgit said:

 

But the Thai Government don't seem to be handing out shed loads of cash to the unemployed, affected businesses etc on the same scale as some Western Governments, all of which will have to repaid sooner ot later.

 

On 4/26/2020 at 3:13 AM, theoldgit said:

 

But the Thai Government don't seem to be handing out shed loads of cash to the unemployed, affected businesses etc on the same scale as some Western Governments, all of which will have to repaid sooner ot later.

I,m self employed in the uk,lost all my work,and haven,t to date received a brass razzo off the goverment,did receive a tax demand today,they can whistle for that.

[JensenZ]

On 4/26/2020 at 8:08 AM, sanemax said:

Considering that Western economies are getting hit much harder than the Thai economy and that Western economies could well be decimated in the future , its highly likely that the Baht will rise  against Western currencies .

(Ha ha. yeah got a bit tongue tied , the Baht will probably rise against Western currencies is what I was trying to say ????

Yes, unlike other countries that are paying dearly to keep their big and small businesses afloat, the PM cries poor and begs the rich people to help out.

[Leaver]

On 5/2/2020 at 12:28 AM, JensenZ said:

the PM cries poor and begs the rich people to help out.

Is that an economic strategy? ????

[Leaver]

On 4/29/2020 at 4:10 PM, SwissCheeseMan said:

No tourists going to Thailand for maybe 1 year or more.  I don't remember the Thailand tourism industry, and its economy, going through something like that in the past.  

 

Difficult for any business, anywhere, at any time, to be sustainable for such a long period of time with little to no turnover.   

[torturedsole]

28 minutes ago, Leaver said:

Difficult for any business, anywhere, at any time, to be sustainable for such a long period of time with little to no turnover.   

Don't be so fast.  I have a very profitable fast-food outlet in Pattaya going for a song due to ill-health, of course.  

[Leaver]

18 hours ago, torturedsole said:

Don't be so fast.  I have a very profitable fast-food outlet in Pattaya going for a song due to ill-health, of course.  

I guess you will be playing that song for some time to come.  

 

So, do you walk away, or run t a loss and hope for a dreamer in 2021?   

[Leaver]

On 5/2/2020 at 12:27 AM, kingdong said:

 

I,m self employed in the uk,lost all my work,and haven,t to date received a brass razzo off the goverment,did receive a tax demand today,they can whistle for that.

There are many people in your situation, all around the world.  Closed boards and flights aside, when do you think you will be able to return to Thailand?