Baht Surge - Why?

[Shoeless Joe]

Can anybody explain why the pound sterling (and other currencies) are losing ground against the baht?
It was only a few months ago in the UK that the pound sterling decreased in value when the Prime Ministerial merry-go-round (with Johnson resigning, followed quickly by Truss and ending up with Sunak in office), was in full swing. The wise economic minds said at the time that the fall in value of the pound sterling was mostly because the markets really didn't like 'political instability'.
So, why isn't the same true of the baht? How can it be gaining stength with the current political turmoil in Thailand (that can't be resolved for at least another week)? Don't the same rules apply? I'm mystified and I'd really appreciate sensible responses.
Thanks,
Joe

 

Edited July 20, 2023 by Shoeless Joe
typo etc

[Polar Bear]

Because turmoil that has the potential to end in MF taking control is still a better option for the international markets than the current setup. If things do work out politically for MF, it will likely rise further. If they don't, it will probably fall. If nothing gets resolved and it remains unstable, there will probably be a slight drop.

The UK situation was different because the international markets liked the status quo, so the changes were just disruptive. 

[Danny Australia]

I am just as perplexed as you are, this situation defies economic logic.

There must be some artificial methods being used to inflate the Baht value.

[3NUMBAS]

inflation said to be falling in uk

[Shoeless Joe]

 

Polar Bear, thank you for your reply.
I'm not sure that your assertion regarding MF is valid and given recent events it looks (to me) that MF is unlikely to be anything but a coalition partner should a new non-military government be formed. That surely exacerbates the situation and doesn't decrease the instaility. I'm happy to admit that my knowledge of economics on this scale is sketchy to say the least. So I'm happy to look at this as a learning process.
Again, thanks,
Joe

[Polar Bear]

In most cases, money markets hate instability, it's true. But it very much depends on what form of government is being destabilised. There are exceptions. I don't think I can go into it any further than that. 

[Shoeless Joe]

12 minutes ago, 3NUMBAS said:

inflation said to be falling in uk

3NUMBAS, thank you.
Please excuse my appalling ignorance but can you further explain how the inflation rate falling in the UK accounts for the strengthening of the baht in Thailand?
Thanks,
Joe
 

Edited July 20, 2023 by Shoeless Joe
typo

[Seppius]

Saw this

 

https://thethaiger.com/news/business/thai-baht-leads-asian-currency-gains-amid-political-resolution-hopes

[StayinThailand2much]

Short answer: weak(er) US$, long answer: it's complicated...

[timendres]

As @StayinThailand2much states, a part of the answer is just a weaker USD. But I also suspect that there were a number of significant investments and purchases that were tied to the election not going pear shaped. It is clear on the chart that the THB (at least against the USD) started to strengthen in the days leading up to the election, then made a large move up shortly after the election.

[DjSilver]

Well, ever since the junta taken power in the dictatorship called Thailand, they have been buying their own currency with both gold and foreign currency to make it strong and keep inflation down. However, this doesn't in real make it strong, since it's just on the paper.

[Expat68]

I gave up trying to understand years ago. I think Asia economy far, far outways Europe, you only have to look at the advertising at premiership grounds, when watching on TV, probably other sports as well

[1FinickyOne]

The wheels on the bus etc...

 

That's life in Kokomo...

 

As you can see the baht is falling again the last couple of days... it's the elevator effect - - sometimes it goes up, sometimes down and there isn't always an obvious reason...  

[1FinickyOne]

17 hours ago, Shoeless Joe said:

3NUMBAS, thank you.
Please excuse my appalling ignorance but can you further explain how the inflation rate falling in the UK accounts for the strengthening of the baht in Thailand?
Thanks,
Joe
 

It is tied to interest rates... lower inflation, lower interest rates, less desirable is the currency, for an outsider... 

[BenStark]

4 minutes ago, 1FinickyOne said:

As you can see the baht is falling again the last couple of days... it's the elevator effect - -

The baht is not falling again, the dollar is recovering

 

[TimeMachine]

I see it as this.  

The banking system has been setup by some powerful and rich groups.  Anything that happens will always be in their best interests.  And because their affairs all happen behind closed doors we will never know. it is just gambling and trying to tie in some key markers when trying to figure out the values. One very important note is there must always be a divide between rich and poor and the currency market is one way to control that. 

[mfd101]

As I understand it, all transactions are via the US$. So - if your 'home' currency is not the US$ - you still need to be aware (eg using XE.com just for information) of the US$/฿ rates.

 

My home currency is AUD and when I'm gearing up for a Wise/BKKBk transfer I always check the 3 relevant currencies - US, AUD, ฿. What I often (NOT invariably) notice is that in the morning ICT (when the - I guess - only relevant systems open are Sydney, Singapore & BKK) the AUD/฿ rates tend to be poor. Mid-afternoon ICT when London opens, the AUD tends to rise a bit. And in the evenings ICT when New York opens, the AUD/฿ reaches its peak for the day. (Mostly. There are no guarantees.)

 

Which - in the broad - means you're mostly going to be best off doing your AUD/฿ transactions sitting at your desk in the evenings.

[AgMech Cowboy]

Is it a Baht surge or because the Europe and Western world are spendin money like it's growing on trees?

 

I think the Baht 'strengthen' this week because the vote was coming up on Wednesday/Thursday, but since it went badly the Baht has been losing some of its luster. Look out next week. I think the Baht will gain again with PT taking power and Srettha heads up the new Gov. (IMHO)

Edited July 21, 2023 by AgMech Cowboy

[thailand49]

19 hours ago, Danny Australia said:

I am just as perplexed as you are, this situation defies economic logic.

There must be some artificial methods being used to inflate the Baht value.

Some will disgree with you they will cite articles economically to try to prove their point.

You say " artificial method " I call it maplipulation now I'll be the first to say it can be moved from 1-10, but a tick here and there either way to their political liking I firmly believe it happen and does.  

We see it happen continuously with China. 

For sure it isn't science can't prove it even if I could but the corrupt government I've joke numerous of time whenever it goes up or down to a point then something or someone comes out don't like it surprise starts to make a reverse.

Just the other day Bloomberg the dollar was reporting stronger across the board but when ticker Thai baht it had dropped. 

Some experts have suggested it shoul( have been dollar 40 plus then some day 30, who really knows? 

What I sense politically if you don't have your head in the sand the corruption past history once those Pita shares came up the outcome was going to be obvious not because I'm that politically smart but I believe in a equation and past presendent if I send a addicted individual time and time again to rehab the chances of putting a bet they will again is a pretty good bet. 

That being said what is happening now was a expectefboutcome Thai leaders knowing it will hurt their economy baht especially gave it a bit of push to strengthen to off set the big drop.  ????????

[koolkarl]

Thai central bank and it's USD swap line.

[Skeptic7]

I've oft wondered the same...for some 20+ years❗Have referred the the Thai currency as "The Bulletproof Baht" as it weathers all ????-storms...political, economic, health, droughts & floods...and always comes out smelling like a????.

????

[Isaan sailor]

I know there are technical reasons for Baht surges and falls.  It just looks wrong when you see all western currencies tank one day, as the Baht surges.

Traders would say it’s “risk on”, but honestly who would take a long position on the Baht?

[natway09]

Complex question & have to look past your nose.

Also many so called 1st world welfare state countries including the UK & USA are not travelling as well as they appear

[sabaiguy]

On 7/21/2023 at 1:36 PM, 1FinickyOne said:

It is tied to interest rates... lower inflation, lower interest rates, less desirable is the currency, for an outsider... 

Happy that you've got it all figured out.

[1FinickyOne]

2 hours ago, sabaiguy said:

Happy that you've got it all figured out.

who said I have it figured out? I just mentioned that there are many factors... 

 

Dtair pom dee jai koon sabai

[mrwebb8825]

All I know is years ago the wife talked me into keeping liquid "swap funds" in both Thailand and the US. When the baht goes up we send USD to Thailand and when the baht goes down we send THB to the states.

We've made around 700,000 - 800,000 baht so far (sorry, we're not rich so the trades are around $5,000-$10,000 but it's still free money)

Our US bank doesn't charge a bank to bank fee and BKK bank only charges a couple hundred baht.

[andux]

On 8/20/2023 at 5:46 PM, mrwebb8825 said:

All I know is years ago the wife talked me into keeping liquid "swap funds" in both Thailand and the US. When the baht goes up we send USD to Thailand and when the baht goes down we send THB to the states.

We've made around 700,000 - 800,000 baht so far (sorry, we're not rich so the trades are around $5,000-$10,000 but it's still free money)

Our US bank doesn't charge a bank to bank fee and BKK bank only charges a couple hundred baht.

Why don't you just set up a forex trading account instead? You'll save a lot in the hidden currency conversion fees that banks have (plus the 200 baht from BKK bank).

[mrwebb8825]

10 hours ago, andux said:

Why don't you just set up a forex trading account instead? You'll save a lot in the hidden currency conversion fees that banks have (plus the 200 baht from BKK bank).

because the way we do it keeps it simple and liquid.