How is the Baht so Strong?

[Patts]

22 minutes ago, 2530Ubon said:

 

If I had a Baht for each time this question was asked this year, I might have enough to buy myself a beer or two.

 

With regards to the 'trade deal' signed with the EU, the UK is a services based economy- around 80.6%GDP and the trade deal we signed with them doesn't cover services. So some might rightly conclude that the 'trade deal' was little more than moving goods around and getting a little bit of fish back. There's a reason all the banks have moved out of London - because they are service based and London is no longer the service center of Europe. 

Yes I read that but it has also been stated that the details of the services agreement will be agreed later. Not sure where we stand but it's certainly placed us in a weak position. 

[Susco]

2 minutes ago, Patts said:

I'm not claiming to be smarter than anyone but I have been investing in NYSE and FTSE for the past few years so have an idea how it works. Gold will fluctuate with the dollar but the huge rally seen in 2020 where it rocketed from $1200 (ish) to $2000 is almost sorely due to fears from the economic fallout from Covid lockdowns

 

I can agree with that, but if you follow the exchange rates, you will see on 90% of the days that if the dollar declines to all major currencies, gold will rise on the same day.And vice versa.

 

I noticed the price rise of gold in the US, and I didn't even have to check to know the dollar had declined.

 

If tomorrow the dollar recovers, the gold price in dollar will decline

[FritsSikkink]

3 hours ago, RichardColeman said:

Yes, I think we should let Thailand have the vaccine at cost only if they add 1 baht to the £ exchange rate for every million doses we give them ???? 

They will produce "your" vaccine here locally in a couple of months.

A country doesn't decide what the exchange rate is. 

[Chivas]

Getting actually back to the OP question of why the Baht is so strong that is purely down to ever increasing monstrous foreign currency reserves and Thailand being seen as a safe haven

Others will now post about debts and God know what else including manipulation but its the sole reason its appreciating against the USD which effects every single one of us bar none when it comes to exchanging money.

 

I had a PM overnight from a member claiming I didnt know what I was talking about as of course theres a direct exchange rate between Sterling and the Baht....only the USD has that privilege against every currency

 

For his (or her) benefit the bottom line is (Sterling/Dollar) x (Dollar/Baht)......No matter what your "base" currency is substitute it for "Sterling" in that example and you'll get your own currencies interbank rate

[Patts]

17 hours ago, FritsSikkink said:

Thailands negativity include: 

• Unemployment growing by millions as the tourism sector has collapsed, an area that contributes between 15-20% of Thailands GDP.       Still a lot less than the UK
• Huge reduction in the export of produce such as rice and coconuts, largely driven by the strong baht and cheaper availability from neighbouring countries   Still exporting more than importing
• Huge reduction in international investments in Thailand.   Still getting a lot of investments
• Public turmoil and protests surrounding the military government and royal family   UK has had that for decades
• Human rights issues in-regard to treatment of protestors under rule/law 112  Nothing to do with currency
• Very slow decision making and purchasing of vaccines to combat Covid; as it stands Thailand will only have enough vaccines for one million people by the end of May and are only planning to vaccinate half the population by the end of 2021.  Way less infections and far better border control than the UK

 

Given that in the past few weeks the UK:

 

• Was the first country to approve a Covid Vaccine.    How may did you give the vaccine at this stage?
• Developed the most cost effective and easy to use Vaccine of any western country which was subsequently approved for use in the last week of December with a plan to vaccinate 2 million citizens per week by mid January and a total of 30 million (approx half the UK population)  by the 4th April 2021. With a plan to vaccinate, that is nice 
• 59 Trade deals signed including highly proclaimed deal with the EU. From a trade deal perspective the UK is in a similar position to where it was pre 2016.  Deal with EU is only for trade and not for services which is 80% of the monetary value. Scotland a net supplier wants out of the union

• You think Thailands unemployment is less than the UK? On paper yes, Thailand is reported to be 1% in 2020 and UK about 4.5% (3m peps)  but Thailands unemployment was also 1% in 2019 so how is that figure even remotely believable when the tourism sector employs 10m and we know many of those are out of work. We have also heard of factory cut backs and closures. 
• Agreed they still export but a lot less then previous years, with 2020 exports down 6.92% which will hit GDP
• Again still getting investments but a big reduction even from 2018 compared to 2019 FDI fell from $10b to $4b
• Funny I haven't seen any protests in the UK for over a year except for the idiots complaining about Lockdown, nothing compared to the tens of thousands protesting the military government, and royal family that has resulted in shootings and a bomb. This does not happen in the UK. 
• lese majeste law has caused international condemnation from the UN and Media which damages a countries reputation which does affect investor appetite.
• I agree, Thailand has done better job than most countries at controlling the outbreak, but now back in Lockdown again, no tourism to speak of for 2020 and now looking like 2021 as well. UK are looking to have vaccinated the whole population by September. Thailand won't be at this stage until Summer 2022. 

 

• Vaccinations have been held back until now due to limited supply of Pfizer vaccine but at this point over a million people have received the vaccine. 
• As of the 4th Jan Uk have opened 720 vaccine centres and started to use the Astrazenica/oxford vaccine. more centres are opening with 1000 due in the next 2 weeks.
• While Scotland has less of a deficit than England and Wales they are NOT a net exporter: https://www.statista.com/statistics/348541/scotland-net-trade/

[Patts]

17 hours ago, 2530Ubon said:

 

If I had a Baht for each time this question was asked this year, I might have enough to buy myself a beer or two.

 

With regards to the 'trade deal' signed with the EU, the UK is a services based economy- around 80.6%GDP and the trade deal we signed with them doesn't cover services. So some might rightly conclude that the 'trade deal' was little more than moving goods around and getting a little bit of fish back. There's a reason all the banks have moved out of London - because they are service based and London is no longer the service center of Europe. 

In regard to UK services:

https://www.cityam.com/brexit-uk-to-start-talks-on-quick-eu-equivalence-deal-for-financial-services/

[nauseus]

18 hours ago, Patts said:

I'm sorry but Gold rallying is absolutely nothing to do with the weak dollar, it's rallied from around $1200 in January to a peak of $2063 in August 2020 as it is a safe haven for investors in time of recession. The Dollar and GBP have been on the slide against THB for years

 

The THB is still relatively strong against most major currencies. Thailand still has substantial foreign reserves and the economy is poised to recover quickly post this Covid problem - foreign investment is down but still continuing. Thai Exports are down but so are imports and the trade balance is still +ve. THB strength is  partly affected by USD weakness. The Pound has recently gained against the USD and has also actually gained very slightly over the THB.  

 

One reason for gold's price rise is actually dollar weakness. With the forthcoming likelihood of more magic money creation to bankroll further US, Japanese and European hardship handouts due to Covid, the USD, Yen, GBP and Euro may well drop some more. Other factors helping gold now are low or near-zero interest rates and fear of fiat currency and major stock market bubble implosions. Plus the threat of inflation of course.

 

 

 

But it's all relative.

Edited January 5, 2021 by nauseus
Plus the threat of inflation of course.

[Patts]

23 minutes ago, nauseus said:

 

The THB is still relatively strong against most major currencies. Thailand still has substantial foreign reserves and the economy is poised to recover quickly post this Covid problem - foreign investment is down but still continuing. Thai Exports are down but so are imports and the trade balance is still +ve. THB strength is  partly affected by USD weakness. The Pound has recently gained against the USD and has also actually gained very slightly over the THB.  

 

One reason for gold's price rise is actually dollar weakness. With the forthcoming likelihood of more magic money creation to bankroll further US, Japanese and European hardship handouts due to Covid, the USD, Yen, GBP and Euro may well drop some more. Other factors helping gold now are low or near-zero interest rates and fear of fiat currency and major stock market bubble implosions. Plus the threat of inflation of course.

 

 

 

But it's all relative.

Thanks for your answer. I agree with most of what you said and I am no expert, but I don't agree: "One reason for gold's price rise is actually dollar weakness". As I have stated before the price of USD does cause fluctuations in Gold price but is not the main reason for the substantial rise in the price of Gold over the past couple of years has been due to investors buying into a safe haven, NOT due to a weak dollar. The global uncertainty leading to most of the rise in the price of gold has been caused by the US trade war with China and Covid19. 

 

Here are 10 year charts for the Dollar index and price of Gold which shows little correlation:

 

[Barnabe]

51 minutes ago, Patts said:

Thanks for your answer. I agree with most of what you said and I am no expert, but I don't agree: "One reason for gold's price rise is actually dollar weakness". As I have stated before the price of USD does cause fluctuations in Gold price but is not the main reason for the substantial rise in the price of Gold over the past couple of years has been due to investors buying into a safe haven, NOT due to a weak dollar. The global uncertainty leading to most of the rise in the price of gold has been caused by the US trade war with China and Covid19. 

 

Here are 10 year charts for the Dollar index and price of Gold which shows little correlation:

 

 

I think what he means dollar weakness in the public perception, not in those charts with fake numbers pumped out by the FED and their friends.

 

The dollar is being printed into oblivion, as is the Euro, Yen and the Pound. That is what causes all other assets such as gold, real estate, stocks etc to become inflated - in reality they are not inflating, it's the dollar that is losing value.

[Patts]

20 minutes ago, Barnabe said:

 

I think what he means dollar weakness in the public perception, not in those charts with fake numbers pumped out by the FED and their friends.

 

The dollar is being printed into oblivion, as is the Euro, Yen and the Pound. That is what causes all other assets such as gold, real estate, stocks etc to become inflated - in reality they are not inflating, it's the dollar that is losing value.

No that's not what was meant as numerous other posters have said the same thing with quotes from Bloomberg and Yahoo. "Faked numbers pumped out by the FED" , nope the value of the dollar is tracked relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners, it cannot just be influenced by the FED

[nauseus]

1 hour ago, Patts said:

Thanks for your answer. I agree with most of what you said and I am no expert, but I don't agree: "One reason for gold's price rise is actually dollar weakness". As I have stated before the price of USD does cause fluctuations in Gold price but is not the main reason for the substantial rise in the price of Gold over the past couple of years has been due to investors buying into a safe haven, NOT due to a weak dollar. The global uncertainty leading to most of the rise in the price of gold has been caused by the US trade war with China and Covid19. 

 

Here are 10 year charts for the Dollar index and price of Gold which shows little correlation:

 

 

Well actually there is some correlation. DYX was near 100 most of the time gold prices were lower. A lag is to be expected. 

 

If DYX goes back to 80 then gold could go to 2500+. Maybe more.

 

But we should be talking about the THB here.

 

[Barnabe]

18 minutes ago, Patts said:

No that's not what was meant as numerous other posters have said the same thing with quotes from Bloomberg and Yahoo. "Faked numbers pumped out by the FED" , nope the value of the dollar is tracked relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners, it cannot just be influenced by the FED

 

You clearly didn't understand my post. All fiat currencies are going down due to money printing, hence why that chart data is meaningless. All other assets are going up.

[Acrylic]

Baht has declined a lot in the past few weeks. 

Edited January 5, 2021 by Acrylic

[kingofthemountain]

31 minutes ago, Acrylic said:

Baht has declined a lot in the past few weeks. 

i don't think so

i don't call ''few satangs'' a lot

[Chivas]

1 hour ago, Acrylic said:

Baht has declined a lot in the past few weeks. 

Its done the opposite !!

Its strengthened against the all important USD the only one that matters now 29.95

 

@nauseus..."The THB is still relatively strong against most major currencies"

 

Thai baht is only measured against the USD and takes its fix 24/7 as regards currency exchange. If you're getting a poor exchange rate than its your own currencies weakness against the USD on the other side of the two pairings thats doing the damage

 

Sterling a prime example

Edited January 5, 2021 by Chivas

[nauseus]

53 minutes ago, Chivas said:

Its done the opposite !!

Its strengthened against the all important USD the only one that matters now 29.95

 

@nauseus..."The THB is still relatively strong against most major currencies"

 

Thai baht is only measured against the USD and takes its fix 24/7 as regards currency exchange. If you're getting a poor exchange rate than its your own currencies weakness against the USD on the other side of the two pairings thats doing the damage

 

Sterling a prime example

 

 

Not quite true, but as I inferred, the value of the Baht is still largely dependent on that of the Dollar.

 

Sterling is one of the few currencies to have actually advanced against the Baht a bit in recent weeks. 

 

[EricTh]

@Patts

 

In reality the currency market is determined by fund managers and not by economic situations.

 

Those economics textbooks that you learnt at university should be thrown away bcos it doesn't tell the truth.

 

If there is huge inflow of fund into Thailand 's stock and bond market, then the currency will go up regardless of the state of the economy.

 

It's all a matter of speculation of the future of the country by fund managers that determine the currency.

Edited January 5, 2021 by EricTh

[talahtnut]

50 minutes ago, EricTh said:

@Patts

 

In reality the currency market is determined by fund managers and not by economic situations.

 

Those economics textbooks that you learnt at university should be thrown away bcos it doesn't tell the truth.

 

If there is huge inflow of fund into Thailand 's stock and bond market, then the currency will go up regardless of the state of the economy.

 

It's all a matter of speculation of the future of the country by fund managers that determine the currency.

Yeah, yer US fund managers and the entire financial system is run by a bunch of crims,

the bloke in the street hasn't got a clue wots going on, the biggest fraud in the world,

with the UK and EU close behind.

The best thing a man can invest in is yer kids..not 'where moth and dust doth corrupt'.

 

[FritsSikkink]

48 minutes ago, talahtnut said:

Yeah, yer US fund managers and the entire financial system is run by a bunch of crims,

the bloke in the street hasn't got a clue wots going on, the biggest fraud in the world,

with the UK and EU close behind.

The best thing a man can invest in is yer kids..not 'where moth and dust doth corrupt'.

 

<deleted>, try to write some proper language.

[Barnabe]

8 hours ago, FritsSikkink said:

<deleted>, try to write some proper language.

He’s not wrong though!

[soi3eddie]

14 hours ago, Barnabe said:

I think what he means dollar weakness in the public perception, not in those charts with fake numbers pumped out by the FED and their friends.

 

The dollar is being printed into oblivion, as is the Euro, Yen and the Pound. That is what causes all other assets such as gold, real estate, stocks etc to become inflated - in reality they are not inflating, it's the dollar that is losing value.

 

Barnabe, it was many posts until someone to post as you have. You are correct. As the US FED and UK BOE and other banks print ever more money, it devalues that money already in existence. The flight to Gold (and speculatively Bitcoin) is seen a safety net against reducing currency values and government bank asset seizures. Beware of in the future, government issued digital currencies as that will mean easier manipulation and total control of our finances and lives. It used to be said that "cash is king" but in these days Gold (or Silver) is where safety is. Bitcoin is like a casino at present and a very risky play (good if you've been in for while though).