Strength of the Baht

[Europeanguy]

I keep reading much about the strength of the Baht.

But at the calculated risk ???? of looking stupid, how can I quantify or graph that?

Of course I follow closely the rates £/ Baths as my money comes from the UK but how can I understand what is caused by which fluctuations of each currencies?

[ukrules]

If you go here : https://www.xe.com/currencycharts/?from=GBP&to=THB&view=1Y

 

You can see the live version of this and change from 1 Year to 1 Month, 5 Years, 10 Years, etc, etc

 

[Europeanguy]

Yes, thank you for your answer. I really do not want to belittle it and I am grateful for it but It doesn't answer my question though. How can I understand what is caused by which fluctuations of each currencies? The £ goes up and down, so the Baht. How do I know the exchange rate is caused by the £ being strong or weak or the Baht being strong or weak? Or both being strong or both being weak. How can you graph that rather than the simple current daily rate.

Kind regards 

 

 

Edited August 28, 2020 by Europeanguy
Forgot something

[Barnabe]

Are you asking how to predict the rate, or why it goes up and down? If so, it is impossible.
 

A million factors are at play, it’s no different than predicting tomorrow’s stock prices or the next lottery number.

 

Whoever tells you otherwise is either lying or fooling themselves (temporarily).

 

Most people who deal in foreign exchange (currency) trading lose, and the few who gain never gain for an extended period of time. Just like in a casino.
 

 

Edited August 28, 2020 by Barnabe

[Airalee]

If I was able to answer the OPs question, I’d be doing it from a super yacht in the Mediterranean and not posting from a hotel room in Krabi.

[SteveK]

The Thai Baht works like this. Keep it astronomically high for a few years so that the elite can buy their properties in New York, Paris and London. Then let it drop, and the elite sell off their assets, netting billions. Sounds insane, but when it's your uncle making the decisions you'd be a fool to not capitalise on it. 

[AlexRich]

The Baht can move up and down for all sorts of reasons, and I’m not sure that even the financial commentators fully understand it. It’s been strong against GBP since the Brexit vote, and given the post-Brexit politics GBP has remained weak. Perhaps with Brexit finally coming to a conclusion and the Covid pandemic ending you might see better numbers. In terms of forecasting, not easy.

[SteveK]

1 minute ago, AlexRich said:

The Baht can move up and down for all sorts of reasons, and I’m not sure that even the financial commentators fully understand it. It’s been strong against GBP since the Brexit vote, and given the post-Brexit politics GBP has remained weak. Perhaps with Brexit finally coming to a conclusion and the Covid pandemic ending you might see better numbers. In terms of forecasting, not easy.

Wake up and smell the cheese, mate. 

[Meat Pie 47]

4 minutes ago, SteveK said:

Wake up and smell the cheese, mate. 

Nah cheese is to expensive, by the way I just transferred AUD a few minutes ago

and if the baht didn't drop the Aussie dollar must gone up a lot.

1 Aussie dollar now 22.72 baht a few days ago just over 21 baht.

 

[SteveK]

1 minute ago, Meat Pie 47 said:

 to expensive  

?

[Meat Pie 47]

1 minute ago, SteveK said:

?

Depends where you live

[Barnabe]

One thing we can all agree is that decent cheese is very expensive in Thailand 

[Airalee]

1 hour ago, Barnabe said:

One thing we can all agree is that decent cheese is very expensive in Thailand 

Makro has some decent deals on cheese.  Much better than Tops, gourmet market and Villa.

 

Back to “forecasting exchange rates” or any other financial issue.  I have always agreed with the saying “ask 10 economists the same question and you’ll get 11 different answers”.  
 

Even having a BS in economics (not sure why my university offered a BS instead of a BA), my opinion is that any kind of economic (or financial) forecasting is much more of an art than a science.  Even then, economists don’t only debate on what might happen in the future....often there can be lingering debates as to why something already happened.

 

One thing I can be sure of...referring to economics as the “dismal science” is pretty apt.

 

I wish more financial and economic prognosticators would admit that they “just don’t know”...but that wouldn’t help sell IBD, WSJ, Economist or Journal of Economic perspectives subscriptions.

[Europeanguy]

Thank you for your answer. I am not sure my original post has been understood, no problems as I perhaps haven't explained it properly. I am not talking of predictions or particular exchange rates between 2 currencies. I will rephrase it: people talk a lot about a strong baht, where do they get that statement from, irrespective of what the hell others currencies are doing? I just do not understand where the statement that Baht is strong comes from.

[dabhand]

11 minutes ago, Europeanguy said:

Thank you for your answer. I am not sure my original post has been understood, no problems as I perhaps haven't explained it properly. I am not talking of predictions or particular exchange rates between 2 currencies. I will rephrase it: people talk a lot about a strong baht, where do they get that statement from, irrespective of what the hell others currencies are doing? I just do not understand where the statement that Baht is strong comes from.

The talk of the strength of the baht is based on movements of the Baht/Usd exchange rate. The other currency movements related to the baht are only a factor of their rates relative to the USD.

 

As an example, the Baht/GBP rate is currently showing the GBP as gaining against the Baht, despite the baht being seen as strengthening against the USD. This is due to the USD weakening against the GBP and other currencies in recent days.  

 

The Baht/USD rate is the driver of comments on the relative strength / weakness of the Baht.

[AlexRich]

16 hours ago, SteveK said:

Wake up and smell the cheese, mate. 

I wouldn’t go anywhere near your pox ridden appendage ... lol.

 

 

[Europeanguy]

On 8/29/2020 at 12:08 PM, dabhand said:

The talk of the strength of the baht is based on movements of the Baht/Usd exchange rate. The other currency movements related to the baht are only a factor of their rates relative to the USD.

 

As an example, the Baht/GBP rate is currently showing the GBP as gaining against the Baht, despite the baht being seen as strengthening against the USD. This is due to the USD weakening against the GBP and other currencies in recent days.  

 

The Baht/USD rate is the driver of comments on the relative strength / weakness of the Baht.

Thank you. It is an answer I can understand.

Edited August 31, 2020 by Europeanguy
Typo correction

[timendres]

On 8/29/2020 at 12:08 PM, dabhand said:

The talk of the strength of the baht is based on movements of the Baht/Usd exchange rate. The other currency movements related to the baht are only a factor of their rates relative to the USD.

 

As an example, the Baht/GBP rate is currently showing the GBP as gaining against the Baht, despite the baht being seen as strengthening against the USD. This is due to the USD weakening against the GBP and other currencies in recent days.  

 

The Baht/USD rate is the driver of comments on the relative strength / weakness of the Baht.

This is about as valid an answer as you can get without some very serious math. Because the USD is considered the "reserve currency of the world", it is simplest (and a simplification) to compare all currency movements against it, and @dabhand's answer sums that up nicely.

[rumak]

On 8/29/2020 at 10:16 AM, Barnabe said:

One thing we can all agree is that decent cheese is very expensive in Thailand 

 

what is most distressing is being in a crowded room and needing to cut the cheese

Edited August 31, 2020 by rumak

[JAS21]

On 8/28/2020 at 9:50 PM, Europeanguy said:

Yes, thank you for your answer. I really do not want to belittle it and I am grateful for it but It doesn't answer my question though. How can I understand what is caused by which fluctuations of each currencies? The £ goes up and down, so the Baht. How do I know the exchange rate is caused by the £ being strong or weak or the Baht being strong or weak? Or both being strong or both being weak. How can you graph that rather than the simple current daily rate.

Kind regards 

 

 

From my son in the UK who should know ... he just told me Dollar Weak  I just got 41.85 GBP/THB using TWise for my monthly transfer exc. charges.

[techietraveller84]

With the fascination over Bitcoin on this site, I'm surprised no one has yet recommended throwing all your extra cash into digital currencies, rather than worrying about foreign currency exchange rates.

[Poet]

16 minutes ago, techietraveller84 said:

With the fascination over Bitcoin on this site, I'm surprised no one has yet recommended throwing all your extra cash into digital currencies, rather than worrying about foreign currency exchange rates.

Anyone with any understanding of how crypto works already has some. Most of the members of this forum are quite elderly and there's no reason why they should have to learn about complicated new stuff at this stage. To most people, of any age, it would be indistinguishable from a scam.

[sezze]

1 hour ago, Poet said:

Anyone with any understanding of how crypto works already has some. Most of the members of this forum are quite elderly and there's no reason why they should have to learn about complicated new stuff at this stage. To most people, of any age, it would be indistinguishable from a scam.

Why would that be the case ? Can you inform me on why people want/need crypto's , cause i cannot see any reason at all why i should need them . And i do know how they work , but for me they aren't worth anything . A coin/valuta is based on many factors , and has a economy to back it up . Even if you find this not true ( because of the excess printing of money ) , there is nothing backing a crypto . You might as well buy wine , as currency . In fact wine has even something since you can drink the wine . A crypto is only worth what people give for it , not any backing from anything else then the people who want it . Does it mean can't be a very good investment , no not at all , if enough people want it , it will go up , but the same goes for the opposite .

[Poet]

43 minutes ago, sezze said:

Why would that be the case ? Can you inform me on why people want/need crypto's , cause i cannot see any reason at all why i should need them .

You absolutely do not need them. As I said, they are not an asset that can be explained as simply as, say, shares in Apple. Under no circumstances would I advise non-techies to go anywhere near the crypto market.

 

43 minutes ago, sezze said:

for me they aren't worth anything .

Every generation has different opportunities. The boomers made their millions on buying real estate cheaply before the booms of the 80s and later decades. My generation made ours on crypto. The Millenials will presumably make their's on Instagram and TikTok, or some other tech wave that I will miss because I don't understand it.

For what it is worth, your arguments against crypto can applied even more strongly against the fiat currencies, especially now when they are all about to be diluted to help pay for Covid. Relative to the fiat currencies, I do expect my crypto holdings to increase roughly ten-fold over the next couple of years, but the massive hundred-fold increases of the past probably won't happen again.

 

Edited September 1, 2020 by Poet

[Barnabe]

5 hours ago, Poet said:

You absolutely do not need them. As I said, they are not an asset that can be explained as simply as, say, shares in Apple. Under no circumstances would I advise non-techies to go anywhere near the crypto market.

 

Every generation has different opportunities. The boomers made their millions on buying real estate cheaply before the booms of the 80s and later decades. My generation made ours on crypto. The Millenials will presumably make their's on Instagram and TikTok, or some other tech wave that I will miss because I don't understand it.

For what it is worth, your arguments against crypto can applied even more strongly against the fiat currencies, especially now when they are all about to be diluted to help pay for Covid. Relative to the fiat currencies, I do expect my crypto holdings to increase roughly ten-fold over the next couple of years, but the massive hundred-fold increases of the past probably won't happen again.

 

I generally agree with you regarding bitcoin’s and perhaps ether’s future, but all other altcoins are just thrash and won’t survive in the long term barring one or two outliers. Bitcoin is here to stay, that’s a given.

 

But you can’t really compare it to fiat currencies are these are government backed. So they are not entirely backed by belief like cryptocurrencies, there is someone at the end of the chain backing it up (even if it’s a weak government).

[Poet]

14 minutes ago, Barnabe said:

all other altcoins are just thrash and won’t survive in the long term barring one or two outliers

Agree 100%.
 

 

14 minutes ago, Barnabe said:

But you can’t really compare it to fiat currencies are these are government backed. So they are not entirely backed by belief like cryptocurrencies, there is someone at the end of the chain backing it up (even if it’s a weak government).

If you think about it, that is the exact opposite of "backing up" the value of those currencies. All fiat currencies are designed to lose value over time. We have long-established precedents that governments, quite deliberately, print more money than can be justified by the actual growth of the economy, and that some amount of inflation is expected.

In times of crisis, they have the recourse to print far more, and this is what they have all been doing, almost without a break, since 9/11 to keep the economies moving at all costs.

This now is probably our biggest crisis, precisely because the money supply was already more inflated than it had ever been. Hyper-inflation is coming, and it is only possible because the governments control those currencies.

 

Edited September 2, 2020 by Poet

[Barnabe]

In theory all you say is true but in practice it’s not as straightforward. First it all depends on the government, no one trusts the Zimbabwe government money but everyone trusts the dollar. Also in a time of crisis people will revert to what they know and drop the unknown.
I think that was the major reason bitcoin dropped during the COVID crisis while everyone (including myself) expected it to behave like gold did.

[Leaver]

On 9/2/2020 at 11:17 AM, Barnabe said:

Also in a time of crisis people will revert to what they know and drop the unknown.

The full extent of global economy downturn from Covid is still unknown.