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Thai Baht Leads Decline as Asian Currencies Dip Amid Quiet Trade


webfact

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Bangkok Bank USD transfers, closing rate on Fri 36.59, opening rate on Mon 36.52 strengthening over the weekend.  Closing at 36.68 on Mon.

Not what I'd exactly characterize as a significant dip/decline  :guitar:

Edited by expat_4_life
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2 hours ago, Mike Lister said:

No, there is no currency swap in place with USD but there is a swap in place with RMB. BOT does however engage heavily in the futures market to an amount equal to almost 50% of their foreign currency reserves. It was this activity that caused the US Fed to label Thailand as a currency manipulator.

Even if the US Treasury Department had the high moral ground to label anyone a currency manipulator (it doesn't), it wouldn't be for the reason most foreigners think.

Most foreigners, particularly those from Western countries, think the Thais prop up the baht, keeping it stronger than it should be and they bemoan the impact that has on the buying power of currencies they bring in.

 

Wrong

The US treasury believed that the Thais were keeping their currency too WEAK and using that to gain competitive advantage for Thailand's exports. If the yanks had their way, the USDTHB exchange rate would be closer to 26 than the near-37 it is now. I think foreigners would have far more to bitch about if the exchange rate went that way.

Worth remembering that the US is the greatest currency manipulator in the history of the world. It issued trillions of worthless government bills, notes and bonds to sell to creditors in return for paltry yields in order to artificially suppress interest rates during the decade of QE. 

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7 minutes ago, BuddyPish said:

Even if the US Treasury Department had the high moral ground to label anyone a currency manipulator (it doesn't), it wouldn't be for the reason most foreigners think.

Most foreigners, particularly those from Western countries, think the Thais prop up the baht, keeping it stronger than it should be and they bemoan the impact that has on the buying power of currencies they bring in.

 

Wrong

The US treasury believed that the Thais were keeping their currency too WEAK and using that to gain competitive advantage for Thailand's exports. If the yanks had their way, the USDTHB exchange rate would be closer to 26 than the near-37 it is now. I think foreigners would have far more to bitch about if the exchange rate went that way.

Worth remembering that the US is the greatest currency manipulator in the history of the world. It issued trillions of worthless government bills, notes and bonds to sell to creditors in return for paltry yields in order to artificially suppress interest rates during the decade of QE. 

You might want to read the article linked below, after which, read the following. The US Fed has long tried to pin the badge of "currency manipulator" on Thailand, mostly because their trade surplus with the US is so large:

 

https://www.cfr.org/article/tracking-currency-manipulation

 

 

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On 6/18/2024 at 3:12 AM, webfact said:

Globally, all eyes are on the upcoming US retail sales numbers for May, slated for release tomorrow. These figures are anticipated to provide further clues regarding the Federal Reserve’s future interest rate cuts this year. Recent Fed projections indicate a single rate cut within this year as per the median forecast from the 19 US central bankers.

 

Retail sales rose less than expected in May increasing by 0.1% v 0.2%. Offers an insight into the weakening of consumer spending and slowing economy which will prompt Federal Reserve to begin lowering interest rate in September. Baht will gain with the anticpated rate cut.  

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