Recent USD downward movement vs baht August 12, 2021

[bamboozled]

This might be on another post somewhere but I didn't find it. This is the eternal question, of course, and yes, I have USD. I'm not really asking the hows and why in general as that's an endless debate. The USD has been going up against the baht a decent bit in the last month or two. I'm just curious what might have caused the .30 drop in the last couple of days. That's the biggest movement in that time span in a long while and it surprised me as the economic signs here are not good. There must have been some news or action that prompted that movement...anyone?

 

Thanks!

Edited August 12, 2021 by bamboozled

[ThailandRyan]

Possibly the many trillion dollar infrastructure bill that was just passed two day ago.  Who really knows anymore.

[tonray]

yesterday's inflation report showed no gain in momentum leading the Treasury market traders to believe that it may indeed be contained and not require such a rapid removal of monetary stimulus.

[The Cipher]

Money printer go brrrrr

[ThailandRyan]

2 minutes ago, The Cipher said:

Money printer go brrrrr

Yes

[bamboozled]

26 minutes ago, tonray said:

yesterday's inflation report showed no gain in momentum leading the Treasury market traders to believe that it may indeed be contained and not require such a rapid removal of monetary stimulus.

Inflation report in Thailand you mean, correct? Meaning folks have renewed faith in the baht? As we like to say, polytetrafluoroethylene baht (teflon).

[tonray]

5 minutes ago, bamboozled said:

Inflation report in Thailand you mean, correct? Meaning folks have renewed faith in the baht? As we like to say, polytetrafluoroethylene baht (teflon).

NO...USA inflation report. The dollar has a lot more to do with the Baht/Dollar exchange rate than the Thai economy does

[EricTh]

The currency rate is determined by western currency speculators and US monetary policy more than Thai economy which is miniscule when compared to USA.

 

Western currency speculators move trillions of dollars around.  It's similar to how the stock market works which is also manipulated by speculators.

Edited August 12, 2021 by EricTh

[bamboozled]

7 minutes ago, tonray said:

NO...USA inflation report. The dollar has a lot more to do with the Baht/Dollar exchange rate than the Thai economy does

Didn't the US report say inflation was continuing to climb in the US? As for the Thai economy not contributing to the exchange rate, are we saying that nothing that happens in the Thai economy will affect the baht's performance? That clearly can't be true but I can see how it's more of a small boat in a big sea. Well, I know it's a very complicated mechanism and I guess I'm trying to make it simple. I suppose that's why it's such a fun puzzle to think about. Confounding.

[tonray]

11 minutes ago, bamboozled said:

Didn't the US report say inflation was continuing to climb in the US? As for the Thai economy not contributing to the exchange rate, are we saying that nothing that happens in the Thai economy will affect the baht's performance? That clearly can't be true but I can see how it's more of a small boat in a big sea. Well, I know it's a very complicated mechanism and I guess I'm trying to make it simple. I suppose that's why it's such a fun puzzle to think about. Confounding.

https://www.ft.com/content/cf64e783-e2fb-4437-bcfd-396ae8a7254a

 

The key takeaway is the inflation report was not a blowout and was in line with expectations, leading traders (who influence real interest rates, which in turn influence the attractiveness of Treasury investments and the dollar) to believe that any rise in rates due to a withdrawal of monetary stimulus would be gradual as expected and not a sudden unexpected surge.

Edited August 12, 2021 by tonray

[mancub]

Baffles me how the Baht gets stronger every time there are scenes involving rubber bullets and tear gas on the streets. 

[CrunchWrapSupreme]

Still up compared to last month.

 

I do monthly transfers for my online teaching. Last month I got 19k baht. This month only 15k baht, but for a lot less teaching.

 

The Chinese govt is cracking down on the foreign teaching platforms, and so all those teachers are now flooding into mine, leaving me with less students. I thought my take would be about sliced in half, but with the dollar up against the baht, it wasn't so bad.

[bamboozled]

35 minutes ago, tonray said:

https://www.ft.com/content/cf64e783-e2fb-4437-bcfd-396ae8a7254a

 

The key takeaway is the inflation report was not a blowout and was in line with expectations, leading traders (who influence real interest rates, which in turn influence the attractiveness of Treasury investments and the dollar) to believe that any rise in rates due to a withdrawal of monetary stimulus would be gradual as expected and not a sudden unexpected surge.

Ok, so they're ok with the rate of inflation, is what you're saying (I can't read that link unfortunately)? But how does that influence the dollar to go down against the baht?

[spidermike007]

1 hour ago, tonray said:

NO...USA inflation report. The dollar has a lot more to do with the Baht/Dollar exchange rate than the Thai economy does

I suspect you are correct. And I think an expectation of a continued downward trend for the baht, is reasonable. There really do not seem to be any positive fundamentals in the economy here. It is utterly devastated, real unemployment might be 30-45%, homelessness is skyrocketing, the condo market is dead in it's tracks, tourism may be gone forever (perhaps 5 million visitors by 2026?), the vaccination program continues to be bungled here, foreign investors are leaving in droves, and there is no confidence in this failed administration, nor is there any real hope for an improvement on any of these fronts, in the near future here. 

Edited August 12, 2021 by spidermike007

[tonray]

7 minutes ago, bamboozled said:

Ok, so they're ok with the rate of inflation, is what you're saying (I can't read that link unfortunately)? But how does that influence the dollar to go down against the baht?

It means interest rates in the US are expected not to rise as quickly as previously anticipated. When rates rise...it makes investment in dollars more attractive to alternatives. Since rates will not rise as fast as expected (presumably) then the dollar will not be as attractive, thereby lowering its xchange rate against other currencies, all other things being equal.

[david555]

I hope the baht keeps going ....as in contradiction to many here  ...i have to transfer end year quit some baht out to Euros .....i was hoping the profit would come .... but the Baht's Teflon became ruining a bit .... now hope again on  my end year Baht to € ????

[bamboozled]

14 minutes ago, tonray said:

It means interest rates in the US are expected not to rise as quickly as previously anticipated. When rates rise...it makes investment in dollars more attractive to alternatives. Since rates will not rise as fast as expected (presumably) then the dollar will not be as attractive, thereby lowering its xchange rate against other currencies, all other things being equal.

That makes some sense. So complicated. So I guess USD going down against the baht is sort of happenstance? Or are big Thai players trading dollar for baht and influencing it? As SpiderMike says, it looks pretty grim here right now. But nothing new there. You only have to look at the last few years to see that it never seems to make a difference. The teflon baht slip-slides along. True I have some emotional bias in the game so maybe I'm not seeing things clearly. Sure, plenty of huge problems in the US, too.

[tonray]

Just now, bamboozled said:

You only have to look at the last few years to see that it never seems to make a difference.

It's also because the US has kept rates near zero longer than Thailand has. The US has effectively devalued the dollar via monetary policy to try and stave off deflation, which after 20 years they finnally may have done...but who really knows. The blip we've seen is happenstance because next month's report or any hint of raising rates by the Federal Reserve would send it in the opposite direction. 

[Cake Monster]

1 hour ago, bamboozled said:

Inflation report in Thailand you mean, correct? Meaning folks have renewed faith in the baht? As we like to say, polytetrafluoroethylene baht (teflon).

PTFE for short

 

[JimGant]

2 hours ago, mancub said:

Baffles me how the Baht gets stronger every time there are scenes involving rubber bullets and tear gas on the streets. 

Nipping insurrection in the bud, and maintaining control of your streets, is good for foreign investment -- and, of course, good for one's currency.

[jesimps]

The Dollar Index (DXY) dipped slightly over the last few days, probably in response to the Infrastructure Bill, so it won't only be Thailand that's effected.

Voting the socialists into power is a signal to start up the money-printing presses. Ask crypto investors what they think of Biden and co.

[kwak250]

20 hours ago, spidermike007 said:

I suspect you are correct. And I think an expectation of a continued downward trend for the baht, is reasonable. There really do not seem to be any positive fundamentals in the economy here. It is utterly devastated, real unemployment might be 30-45%, homelessness is skyrocketing, the condo market is dead in it's tracks, tourism may be gone forever (perhaps 5 million visitors by 2026?), the vaccination program continues to be bungled here, foreign investors are leaving in droves, and there is no confidence in this failed administration, nor is there any real hope for an improvement on any of these fronts, in the near future here. 

Well that brightened up my morning!

[worgeordie]

Not only US $ , the Pound which looked like it was

heading for 47 to Baht ,has slid back down to under

46 , speculators at work ?,as I don't see any good news

from Thailand.

regards Worgeordie

[thailand49]

My guess is good as yours?  but each time I read an article in the Bangkok Post in regards to the baht the powers to be someone gets a hair up their butts thinks it is going too high or low the next day it changes directions?  Here it doesn't look like the free market but who has the power to flip the switch?????

 

Here you better put your thinking caps on and understand the rules of the game?  Last week reported the baht is going to get weaker then it reverses direction?  Now when it comes to the virus, they are trying to put a good spin to the raising numbers of infection by reporting recoveries of infected are outnumbering the daily infected?????

Edited August 13, 2021 by thailand49

[JayBird]

I saw the sudden movement from nearly 33.45 to just under 33.00 over the course of two days.

 

The DXY movement would not account for that.

 

There were a flurry of positive earnings reports from Thai companies at that time which may have influenced the movement.

 

It's also possible the 33.45 point could have triggered some algorithms to kick in and do some trades.  The 3 days prior showed little movement, so it may have suggested less chance to continue to go up.

 

I believe 33.xx is  a key point as it matches close to where it was before a sudden drop towards 29.

 

Others may have felt the same.

[bamboozled]

The bath never goes up that fast but always much slower, despite all the negative factors. The USD, however, can change quickly. Perhaps that's due to the size of the economy and all the players. But I'm pretty dumb on the subject.

[Isaan sailor]

Yeah, suddenly the international currency traders foolishly think Thailand a good place to park money, again.  Notice how USD, Euro and Pound all swooned in last 48 hours, as the mighty Teflon Baht rose.

Of course, it doesn’t help to see the trickery in US Congress, whereby a $1.1 billion bipartisan infrastructure bill transforms into a $3.6 socialist extravaganza by Nancy Pelosi.

[chicowoodduck]

19 minutes ago, Isaan sailor said:

Yeah, suddenly the international currency traders foolishly think Thailand a good place to park money, again.  Notice how USD, Euro and Pound all swooned in last 48 hours, as the mighty Teflon Baht rose.

Of course, it doesn’t help to see the trickery in US Congress, whereby a $1.1 billion bipartisan infrastructure bill transforms into a $3.6 socialist extravaganza by Nancy Pelosi.

Let me take a wild guess....you would love to have that former president (sorry, forgot his name) try and run the show.....right into the ground. ????????

[kennw]

23 hours ago, EricTh said:

The currency rate is determined by western currency speculators and US monetary policy more than Thai economy which is miniscule when compared to USA.

 

Western currency speculators move trillions of dollars around.  It's similar to how the stock market works which is also manipulated by speculators.

FX transactions are much larger than all stock trades world wide. The Thai Baht trend line offered speculator opportunity, ie. the dip. Look at the trend line though, try to catch it on the up. 

[bamboozled]

8 minutes ago, kennw said:

FX transactions are much larger than all stock trades world wide. The Thai Baht trend line offered speculator opportunity, ie. the dip. Look at the trend line though, try to catch it on the up. 

Can you explain what you're getting at? The first part is easy enough, FX is huge. But what opportunity did the baht offer? It was becoming less valuable, as far as I could tell. So how was that an opportunity?