Thai baht could depreciate further against US dollar, says K-Research

[webfact]

The Thai baht, already experiencing a downward trend, could further depreciate against the US dollar, potentially reaching 36 baht to a dollar, according to Kasikorn Research Centre (K-Research). This forecast is contingent upon robust US economic data, set to be released later this week, which could indicate a resilient US economy. Additionally, any delays in the Federal Reserve’s proposed trimming of interest rates could contribute to this scenario.

 

K-Research has noted continued capital outflows due to Thailand’s weaker-than-expected economic results. The baht was trading between 35.76-78 against the US dollar on Thursday, a slight depreciation from Wednesday’s closing rate of 35.68, following the release of the US Manufacturing and Services Purchasing Managers’ Indices for January. Both indices recorded their highest levels in over half a year, causing the baht to tumble to a two-month low of 35.88 during Wednesday’s trading.

 

Kanjana Chockpisansin, head of research at K-Research, suggested that these signs of resilience within the US manufacturing and service sectors could influence the Federal Reserve to maintain its high-interest rates for a longer period, given that inflation remains above the central bank’s target. She anticipates the earliest rate cuts to occur in the second quarter of this year.

 

However, the Thai economy’s outlook remains precarious, lacking the fundamental factors required to stimulate growth. Kanjana revealed that as of January 24, the Thai stock market had seen fund outflows totalling 23.9 billion baht (US$668 million) year-to-date, with foreign investors also selling Thai bonds worth 5.9 billion baht (US$165 million).

 

by Alex Morgan

Photo courtesy of iStock

 

Full story: The Thaiger 2024-01-26

 

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[sirineou]

Loving it!! 

How low can you go?

[Ben Zioner]

Good. Bad because of the income tax brackets.

[Pouatchee]

GREAT NEWS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[retarius]

Depends on interest rates largely. If Biden's poll numbers keep declining and the Fed are forced to US cut sharply in the it may go the other way.

[flyingtlger]

The lower for better if you have $'s...

[The Old Bull]

About time used to get 31 or 32 for a Canadian dollar now get 26.

[hotchilli]

Good news for foreigners and Thai businesses..

[khunjake]

Unless the USD/THB gets into the 37.5-40 range, the currency will still be very uncompetitive by comparison of regional peers such as the weak MYR and IDR. Instead of BOT bickering about rates, look at the core issue of failed FDI. Its because the baht is simply to strong to attract capital investment and increased tourism. 

[BritManToo]

Thought the fall was due to 'All Inspire' defaulting on 2.5Bbht of bonds.

With more defaults from other big companies in the pipeline.

[Purdey]

I wonder who improved the US economy? 

[Red Forever]

22 minutes ago, Purdey said:

I wonder who improved the US economy? 

Obama. 

[ozimoron]

31 minutes ago, Purdey said:

I wonder who improved the US economy? 

 

One clue is that the economy always does better under democrat presidents.

 

https://cepr.org/voxeu/columns/us-economy-performs-better-under-democratic-presidents-why

 

Who said this?

 

"You know, it's interesting, I've been now around long -- you know, I think of myself as a young guy, but I'm not so young anymore. And I've been around for a long time. And it just seems that the economy does better under the Democrats than the Republicans."

 

https://news.yahoo.com/fact-check-2004-donald-trump-200800846.html

 

Edited January 26 by ozimoron

[Srikcir]

28 minutes ago, Purdey said:

I wonder who improved the US economy? 

Biden.

Unemployment rates down to 3.6%

2023 deficit reduced by $320 billion

2024 deficit forecast to reduce by $1.7 trillion

13 million new jobs including 800,000 manufacturing jobs

Infrastructure funding added 35,000 new projects

Inflation-adjusted income up 3.5%

 

 

[Trippy]

18 minutes ago, Srikcir said:

Biden.

Unemployment rates down to 3.6%

2023 deficit reduced by $320 billion

2024 deficit forecast to reduce by $1.7 trillion

13 million new jobs including 800,000 manufacturing jobs

Infrastructure funding added 35,000 new projects

Inflation-adjusted income up 3.5%

 

 

The deficit was $1.7 trillion for the most recent fiscal year, which ended September 30, according to Treasury Department data released Friday. That marks a $320 billion, or 23%, increase from the prior fiscal year.

 

https://www.cnn.com/2023/10/20/politics/federal-budget-deficit/index.html

[Trippy]

25 minutes ago, Srikcir said:

Biden.

Unemployment rates down to 3.6%

2023 deficit reduced by $320 billion

2024 deficit forecast to reduce by $1.7 trillion

13 million new jobs including 800,000 manufacturing jobs

Infrastructure funding added 35,000 new projects

Inflation-adjusted income up 3.5%

 

 

Nearly 72 percent of all job gains since 2021 were simply jobs that were being recovered from the pandemic, not new job creation. In fact, when looking at today’s economy compared to pre-pandemic levels, employment is up only by 3.7 million, not 13 million.

 

https://budget.house.gov/press-release/fact-check-setting-the-record-straight-on-bidenomics

[thailand49]

Oh no  get be a crying towel!🤣

[ExpatOilWorker]

1 hour ago, BritManToo said:

Thought the fall was due to 'All Inspire' defaulting on 2.5Bbht of bonds.

With more defaults from other big companies in the pipeline.

They haven't defaulted on all of their 2.3 billion baht worth of bonds, only some 710 billion baht.

[Guderian]

Could the Baht's decline since the start of the year be in any way linked to the fact that hundreds of thousands of expats are no longer remitting money into Thai Baht on a regular basis due to the taxation uncertainty?

[ozimoron]

3 minutes ago, Guderian said:

Could the Baht's decline since the start of the year be in any way linked to the fact that hundreds of thousands of expats are no longer remitting money into Thai Baht on a regular basis due to the taxation uncertainty?

 

Unlikely. It's very likely to do with the rapidly rising US dollar index DXY.

[Mike Lister]

2 minutes ago, Guderian said:

Could the Baht's decline since the start of the year be in any way linked to the fact that hundreds of thousands of expats are no longer remitting money into Thai Baht on a regular basis due to the taxation uncertainty?

Almost certainly no, most of the "decline" results from the strengthening of USD. 

 

https://www.xe.com/currencycharts/?from=USD&to=THB

 

https://www.marketwatch.com/investing/index/dxy

[BenStark]

2 hours ago, Srikcir said:

2023 deficit reduced by $320 billion

2024 deficit forecast to reduce by $1.7 trillion

 

Because you tell a lie many times, doesn't make it a truth

https://www.usgovernmentspending.com/debt_deficit_history

 

 

 

https://fiscaldata.treasury.gov/americas-finance-guide/national-deficit/

[n00dle]

4 hours ago, The Old Bull said:

About time used to get 31 or 32 for a Canadian dollar now get 26.

Sure it did, for 18 minutes in 1997 and a few months in 1998.

 

if you are going to reminisce, why not dream about the day it hit 37, I had Canadian friends visiting with a few thousand worth of traveler checks that doubled in value, we got right messy on the beach for a month,

This is a classic case of selective memory. Before that, we got 18 baht  for 1 CAD and things settled down in the next 6 to 8 months 

 

Edited January 26 by n00dle

[spidermike007]

4 hours ago, Srikcir said:

Biden.

Unemployment rates down to 3.6%

2023 deficit reduced by $320 billion

2024 deficit forecast to reduce by $1.7 trillion

13 million new jobs including 800,000 manufacturing jobs

Infrastructure funding added 35,000 new projects

Inflation-adjusted income up 3.5%

 

 

Real inflation in the US is still hovering in the neighborhood of 20% I don't know where they get these numbers of 3.5 but every time I walk into the grocery store in the US my favorite products are up 20% after 2 or 3 months. No, inflation is barely dropping, the basket of commodities that they use has nothing to do with real life. And and consumer confidence is extremely weak too. 

[NedR69]

I doubt this…just watch, the closer we get to Songkran, the baht will begin it’s climb, and after the holiday, it’ll fall again and probably gradually loose through out the low season.  The same happened last year and as we got closer to high season, it began to fall.

[Mike Lister]

3 hours ago, NedR69 said:

I doubt this…just watch, the closer we get to Songkran, the baht will begin it’s climb, and after the holiday, it’ll fall again and probably gradually loose through out the low season.  The same happened last year and as we got closer to high season, it began to fall.

I don't think so. The value of THB is dependent on the value of US, there is almost no repetitive seasonal adjustment in THB value.

 

https://www.xe.com/currencycharts/?from=USD&to=THB

 

 

[Guderian]

 

16 hours ago, Mike Lister said:

Almost certainly no, most of the "decline" results from the strengthening of USD. 

 

https://www.xe.com/currencycharts/?from=USD&to=THB

 

https://www.marketwatch.com/investing/index/dxy

 

Unless Sterling and the Euro have somehow become magically connected to the USD, then it's a weakening of the THB, not a strengthening of the USD. And that is consistent with my hypothesis that it may be at least partly due to a major reduction in expat remittances into Thailand across all the main currencies.

 

 

 

Edited January 27 by Guderian

[Mike Lister]

12 minutes ago, Guderian said:

 

 

Nonsense. Unless Sterling and the Euro have somehow become magically connected to the USD, then it's a weakening of the THB, not the strengthening of the USD. And that is consistent with my hypothesis that it may be at least partly due to a major reduction in expat remittances into Thailand.

 

 

 

You may wish to read the following write up which explains the THB exchange rate quite well. The Pound does not have a direct relationship with THB, the GBP/THB exchange rate is calculated from USD/THB and is a cross rate based on USD value, as is EURO/THB. So yes, the Pound and EURO are connected to USD although there's no magic involved. 

 

 

[william61]

Maybe it is only a part related to the USD, as also Euro is gaining value.
It is for a large part related to the poor performance of the Thai stocks and bonds. My Tisco retirement fund has been reducing a bit in value last months, even while more money is put in each month....

[TimBKK]

14 hours ago, spidermike007 said:

Real inflation in the US is still hovering in the neighborhood of 20% I don't know where they get these numbers of 3.5 but every time I walk into the grocery store in the US my favorite products are up 20% after 2 or 3 months. No, inflation is barely dropping, the basket of commodities that they use has nothing to do with real life. And and consumer confidence is extremely weak too. 

I hear you about food/restaurant sticker shock - it’s real and more so returning for a visit from Thailand.  
 

But, at the risk of straying a bit off topic, you are wrong about consumer confidence, it is in fact surging:

 

”The University of Michigan's consumer sentiment for the US soared to 78.8 in January 2024, the highest since July 2021, compared to 69.7 in December and forecasts of 70, preliminary estimates showed. Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations...”

 

”Taking January and December together, consumer sentiment has climbed a cumulative 29%, the largest two-month increase since 1991 as a recession ended. For the second straight month, all five index components rose, with a 27% surge in the short-run outlook for business conditions and a 14% gain in current personal finances. source: University of Michigan”

 

https://tradingeconomics.com/united-states/consumer-confidence#:~:text=January of 2024.-,Consumer Confidence in the United States increased to 78.80 points,macro models and analysts expectations.