Baht falls to three-month low as US inflation delays expected rate cut

[webfact]

 

The baht, Thailand’s currency, hit a three-month low against the US dollar yesterday, February 14, slipping below 36 to the dollar. This was attributed to higher than anticipated US inflation, which led the market to predict a delay in the Federal Reserve’s first interest rate cut, initially expected in May.

 

Quoting Kasikorn Research Centre, the baht was valued at a low of 36.13 against the dollar before rising slightly to 36.07 to 36.09 baht. This is compared to Tuesday’s closing rate of 35.7 baht.

 

Kanjana Chockpisansin, head of research at the think tank, stated, “The baht is moving in line with other Asian currencies, as the world gold price also fell below US$2000 per ounce.”

The US dollar and bond yield experienced a sharp increase following the rise of the US consumer price index (CPI) by 3.1% year-on-year in January, beating the 2.9% market prediction. The core CPI also exceeded expectations, at 3.9% against a forecast of 3.7%.

 

by Alex Morgan 

Picture courtesy of Kaohoon

 

Full story: The Thaiger 2024-02-15

 

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“Those readings might prompt the Fed to maintain rates for longer. The market now sees a lower probability of the Federal Open Market Committee’s first rate cut in May, only tallying 35%,” said Kanjana.

 

Kanjana also suggested that the baht could weaken further with the slow decline of US inflation and strong economic data, indicating that the Fed might not cut rates as early as previously forecasted, reported Bangkok Post.

[KannikaP]

59 minutes ago, webfact said:

The baht, Thailand’s currency, hit a three-month low against the US dollar yesterday, February 14, slipping below 36 to the dollar.

Is the app on my phone not working correctly?

[Everyman]

Only the most stupid, glue huffing morons think the fed will cut rates. Why would they cut? Inflation in above targets, there is still a huge debt bubble that needs to be resolved. 

 

Just wishful thinking by greedy wallstreet idiots who are always wrong. 

[Mike Lister]

1 hour ago, Everyman said:

Only the most stupid, glue huffing morons think the fed will cut rates. Why would they cut? Inflation in above targets, there is still a huge debt bubble that needs to be resolved. 

 

Just wishful thinking by greedy wallstreet idiots who are always wrong. 

 

The US CPI report was released yesterday, up until that point, there was every indication that inflation might come in flat or slightly down.

 

https://www.morningstar.ca/ca/news/246190/us-inflation-surprise-unsettles-markets.aspx#:~:text=The Bureau of Labor Statistics,faster than economists had predicted.

[Mike Lister]

1 hour ago, KannikaP said:

Is the app on my phone not working correctly?

Nope, that's what it is. But it may not last.

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

 

[BenStark]

1 hour ago, Everyman said:

Only the most stupid, glue huffing morons think the fed will cut rates. Why would they cut? Inflation in above targets, there is still a huge debt bubble that needs to be resolved. 

 

 

What you mean?

 

https://aseannow.com/topic/1317031-trusting-a-thai-bank-that-offers-5-savings-to-hold-usd/?do=findComment&comment=18626039

 

US rates will fall this year, that is as certain as anything ever is in life. And the forecast is they will fall by up to 2%

[Scott Tracy]

1 hour ago, BenStark said:

US rates will fall this year, that is as certain as anything ever is in life. And the forecast is they will fall by up to 2

Soothsayers and charlatans deliver forecasts. 

 

UK 'expectation' was inflation would tick up. Lo and behold it held steady. Why any one gives credence to these highly paid Crystal ball gazers is beyond me.

[soalbundy]

4 hours ago, Everyman said:

Only the most stupid, glue huffing morons think the fed will cut rates. Why would they cut? Inflation in above targets, there is still a huge debt bubble that needs to be resolved. 

 

Just wishful thinking by greedy wallstreet idiots who are always wrong. 

It rather depends on the state of the economy. Retail sales are down when adjusted for inflation which means lower factory production, already layoffs are in the pipeline as 3,4,5 month severance payments mean people haven't yet registered for social security payments, defaults on mortgage payments and credit card debts are rising and the massive drop in the value of commercial buildings, 40 to 50% which are on the books of small to medium sized banks are a harbinger of bank failures to come, this all points to an economic crash, especially as the inverted yield curves foresee this and the Fed (too late as always) will have to massively drop interest rates no matter what the inflation rates are in a belated attempt to revitalize the economy (historically this doesn't work sustainably).

[Srikcir]

46 minutes ago, soalbundy said:

It rather depends on the state of the economy.

Doom and gloom not there yet. Sorry.

"Federal Reserve's interest rate hikes no match for the Rockettes," Feb. 13, 2024 www.washingtonpost.com

• "As a percentage of disposable income, debt service payments are no larger than they were when the Fed began raising rates and are still slightly lower than on the eve of the pandemic."
• Many consumers and businesses today are less sensitive to higher rates than in the past, thanks in part to the pandemic's legacy."

[Mike Lister]

1 minute ago, Srikcir said:

Doom and gloom not there yet. Sorry.

"Federal Reserve's interest rate hikes no match for the Rockettes," Feb. 13, 2024 www.washingtonpost.com

• "As a percentage of disposable income, debt service payments are no larger than they were when the Fed began raising rates and are still slightly lower than on the eve of the pandemic."
• Many consumers and businesses today are less sensitive to higher rates than in the past, thanks in part to the pandemic's legacy."

For consumers, yes, for the government, no.

[Mike Lister]

1 hour ago, Scott Tracy said:

Soothsayers and charlatans deliver forecasts. 

 

UK 'expectation' was inflation would tick up. Lo and behold it held steady. Why any one gives credence to these highly paid Crystal ball gazers is beyond me.

The UK economy is more difficult to accurately forecast than the US, it's reliance on overseas markets being one reason, it's size being another.

[bkk6060]

5 hours ago, Everyman said:

Only the most stupid, glue huffing morons think the fed will cut rates. Why would they cut? Inflation in above targets, there is still a huge debt bubble that needs to be resolved. 

 

Just wishful thinking by greedy wallstreet idiots who are always wrong. 

I agree it will be difficult to ease.  Maybe .25, but inflation is steady not decreasing at this point. And, it can be political an ease of rates could help Biden.

 

On the other hand, unemployment is low and earning have been decent.

The AI craze is just starting.

I bet the S and P ends the year up 10 to 15%

[soalbundy]

1 hour ago, Srikcir said:

Doom and gloom not there yet. Sorry.

"Federal Reserve's interest rate hikes no match for the Rockettes," Feb. 13, 2024 www.washingtonpost.com

• "As a percentage of disposable income, debt service payments are no larger than they were when the Fed began raising rates and are still slightly lower than on the eve of the pandemic."
• Many consumers and businesses today are less sensitive to higher rates than in the past, thanks in part to the pandemic's legacy."

According to some American financial investors, many credit cards are maxed out and banks are tightening lending standards even more and so many retailers are having to offer 'buy now pay later' schemes.

The Pandemic money is running out and in addition people are having to restart paying their student loans monthly. The housing market, along with commercial real estate is in bad shape. America is having to borrow money to pay the interest on the 34 trillion dollar debt load, as one expert put it, " If America was a company they would have to file for bankruptcy." This is the first time that the world experiences a world synchronized recession which is way beyond the ability of the central banks ability to combat. Enter the Brics with their own IMF and soon a gold backed trading currency and in a few years time America loses it's status as a reserve currency.

[Mike Lister]

13 minutes ago, soalbundy said:

According to some American financial investors, many credit cards are maxed out and banks are tightening lending standards even more and so many retailers are having to offer 'buy now pay later' schemes.

The Pandemic money is running out and in addition people are having to restart paying their student loans monthly. The housing market, along with commercial real estate is in bad shape. America is having to borrow money to pay the interest on the 34 trillion dollar debt load, as one expert put it, " If America was a company they would have to file for bankruptcy." This is the first time that the world experiences a world synchronized recession which is way beyond the ability of the central banks ability to combat. Enter the Brics with their own IMF and soon a gold backed trading currency and in a few years time America loses it's status as a reserve currency.

Exactly. The conundrum is, if the US has a liquidity crisis because it can't pay interest on its debt, where does it go.

[soalbundy]

8 minutes ago, Mike Lister said:

Exactly. The conundrum is, if the US has a liquidity crisis because it can't pay interest on its debt, where does it go.

Usually war and a monetary reset is the answer. I don't think that will work this time though but something is going to break worldwide and it wont be to the advantage of the 99%.

[uttradit]

7 hours ago, Everyman said:

Only the most stupid, glue huffing morons think the fed will cut rates. Why would they cut? Inflation in above targets, there is still a huge debt bubble that needs to be resolved. 

 

Just wishful thinking by greedy wallstreet idiots who are always wrong. 

Fed wants 2% inflation. It's 3.4%. No cuts. If it goes over 4% again they will raise rates.

[G_Money]

Currently from XE.

Funny how it usually drops around the first of the month whenever I send to my Thai bank,

 

[Mike Lister]

3 minutes ago, G_Money said:

Currently from XE.

Funny how it usually drops around the first of the month whenever I send to my Thai bank,

 

US social security is payable on number  3 every month, that sells usd and buys baht.

[Smokin Joe]

10 minutes ago, Mike Lister said:

US social security is payable on number  3 every month, that sells usd and buys baht.

 

Payment date depends where you signed up. Payable on the 3rd if you signed up overseas but many folks signed up in the US. I'm pretty sure that once you start Social Security that your payment date stays the same even if you move overseas or vice versa.

 

 

To see your next payment date, create or log on to your my Social Security online account and go to the “Benefits & Payments” section.

In general, here’s how we assign payment dates:

• If you were born on the 1^st through the 10^th of the month, you’ll be paid on the second Wednesday of the month.
• If you were born on the 11th through the 20^th of the month, you’ll be paid on the third Wednesday of the month.
• If you were born after the 20^th of the month, you’ll be paid on the fourth Wednesday of the month.

There are exceptions. For example, children and spouses who receive benefits based on someone else’s work record will be paid on the same day as the primary beneficiary.

For others, we may issue your payments on the 3rd of each month. Among other reasons, we do this if:

• You filed for benefits before May 1, 1997.
• You also receive a Supplemental Security Income (SSI) payment.
• Your Medicare premiums are paid for by the state where you live.
• You live in a foreign country.

[Mike Lister]

3 minutes ago, uttradit said:

Thanks Joe Biden. Wants to send more money overseas. Just madness. The US is heading towards a Japanese style recession.

The subject is the baht, not Biden.

[AgMech Cowboy]

I find it laughable that so many of the 'financial' writers in the US keep hinting at a rate cut.  They and the rich f_ks that don't need one or are only marginally affected by inflation keep parroting this noise. Inflation is still high. Such sweet words like it's only 3.1 when you take the volatile food and energy cost out of it. And yet, those are the things that common people buy. Bunch of cr_p mouthed whiners.

[soalbundy]

Just now, uttradit said:

Thanks Joe Biden. Wants to send more money overseas. Just madness. The US is heading towards a Japanese style recession.

Every Western country sends money overseas even when they are in recession, it has to do with soft power and political influence, they all expect something back, call it an investment....an oil company may be more likely to get a drilling license if that country is well disposed to the oil company's government for instance. The whole world is heading for a recession, possibly even depression which is more difficult to get out of as Japan well knows, they've been in one for 20 years, inflation would be an improvement for them. It's the first time ever that a world synchronized recession has happened and nobody knows how to deal with it.

[uttradit]

https://www.reuters.com/markets/us/traders-bet-fed-wont-cut-rates-until-june-inflation-fails-cool-2024-02-13/

 

No rate cuts for a few months at least. 

[soalbundy]

Just now, AgMech Cowboy said:

I find it laughable that so many of the 'financial' writers in the US keep hinting at a rate cut.  They and the rich f_ks that don't need one or are only marginally affected by inflation keep parroting this noise. Inflation is still high. Such sweet words like it's only 3.1 when you take the volatile food and energy cost out of it. And yet, those are the things that common people buy. Bunch of cr_p mouthed whiners.

There will be rate cuts, maybe even to zero. When layoffs start becoming a big problem (and they are starting) spending goes down and with it inflation nosedives. Bank failures and company bankruptcies start massing and then the Fed, too late as usual, loosens the borrowing rates but banks can't make money with low interest rates so they tighten credit, it's a 'my God what have we done' moment for the Fed and/or central banks. Before this era there were always other countries who weren't in recession (usually China or the USA) who could act as an economic engine to pull the one or two countries out of trouble but this time the whole industrialized world is in trouble, no engine in sight.

[CartagenaWarlock]

I like the rate where it is now. My coming two year's expenses are in cash invested in a one- to three-month US Treasury bond to avoid state sales taxes. The rest of the money in my Roth IRA and IRA is in VOO and other ETFs, which is giving me plenty of returns. The market wants cheap money for gains instead of the companies' profits and management.

[soalbundy]

18 hours ago, bkk6060 said:

I agree it will be difficult to ease.  Maybe .25, but inflation is steady not decreasing at this point. And, it can be political an ease of rates could help Biden.

 

On the other hand, unemployment is low and earning have been decent.

The AI craze is just starting.

I bet the S and P ends the year up 10 to 15%

Actually earnings aren't decent, what the Fed has conveniently ignored is that although hourly rates have risen employers have curtailed the number of hours worked due to lack of new orders. At the moment backlogs are being worked through and employers are loath to fire trained workers but sooner or later that has to happen, this recession isn't going away. Analysts have reckoned that the S&P will reach 6,000 followed by a crash to 2,000 mid year. Fired employees who have received several months of severance payments haven't yet applied for social security so these numbers aren't yet in the statistics. There are now many thousands of long term unemployed who can't find new employment, hardly a sign of a booming economy.  

[Mike Lister]

And what about the Thai Baht side of the equation, any sunlight Peking through the cracks? 🙂

[Mike Lister]

"China Holiday Travel Surge Hints at Consumer Spending Pickup".

 

“The Chinese consumer is beginning to stir,” said Frederic Neumann, chief Asia economist at HSBC Holdings.

 

https://www.businesstimes.com.sg/international/global/china-holiday-travel-surge-hints-consumer-spending-pickup#:~:text=A RESURGENCE in travel over,with low confidence and deflation.