Baht volatility surpasses regional currencies amid US rate cut speculation

[snoop1130]

 

The baht has shown notable volatility against the US dollar, surpassing its regional counterparts primarily due to market expectations of a US policy rate cut and Thailand’s substantial gold imports.

 

Year-to-date, the baht’s volatility rate is 7.3%, just below the Korean won’s 7.4%. However, it exceeds other regional currencies, with the Malaysian ringgit and Indonesian rupiah at 5.5%, the Philippine peso at 4.7%, the Taiwanese dollar at 4.1%, the Singapore dollar at 3.7%, and the Vietnamese dong at 2.4%.

 

In contrast, the US Dollar Index has recorded a volatility rate of 5.3%, as reported by Kasikorn Research (K-Research). This index measures the value of the US dollar relative to a basket of foreign currencies, often those of key US trade partners.

 

The baht has been particularly unstable since yesterday, fluctuating between 33.45 and 33.78 baht per dollar, influenced by global gold prices. On September 6, it reached a 19-month high of 33.49 against the dollar.

 

Yesterday, September 9, the baht opened at 33.63 per dollar, depreciating sharply from the closing rate of 33.52 to the greenback on September 6. This week, it is expected to move within a range of 33.30-34 baht per dollar.

 

 

 

 

Kanjana Chockpisansin, head of research for banking and the financial sector at K-Research, highlighted key factors to monitor, including the new government’s economic policies, foreign fund flows, global gold price movements, and US economic data.

 

Baht volatility

 

Poon Panitchpibun, a money market strategist at Krungthai Global Markets, attributed the baht’s significant depreciation to the dollar and gold price movements based on US economic data.

 

In August, US non-farm payrolls increased by 142,000 positions, below the market expectation of 160,000. However, employment rates improved in some segments. This scenario led some investors to revise their expectations, predicting that the US Federal Reserve (Fed) would not cut its policy rate by 50 basis points as previously expected, thereby supporting a stronger dollar compared to the baht.

 

Krungthai forecasts the baht will move in a range of 33.40 to 34.10 per dollar this week.

 

Separately, TTB Analytics projects continued volatility for the baht, driven largely by the dollar in line with the Fed’s policy rate direction and the upward trend in global gold prices. The gold price surged 21% year-to-date (as of September 3), aligning more closely with the baht’s movement than with other regional currencies.

 

Thailand ranks among the top global gold trading nations, representing an average of 5% of global gold trading over the past five years, according to TTB Analytics, reported Bangkok Post.

 

Thailand’s gold imports are also higher than those of other regional countries, reflecting the gold investment preferences of Thai investors, TTB Analytics noted.

 

By Bright Choomanee

Picture courtesy of Thairath

 

Source: The Thaiger

-- 2024-09-10

 

 

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[DonniePeverley]

Had it not been for Brexit the pound would be hovering around 60 Baht to the pound. Racists ruined it all. 

[hotchilli]

13 hours ago, DonniePeverley said:

Had it not been for Brexit the pound would be hovering around 60 Baht to the pound. Racists ruined it all. 

What racists?

[lapamita]

The Baht strengh , have nothing to do with the local economy, its  a fall of the USD against all currencys.

Speculation on narrowing intrest rate  in US, risk off , Carytrades.

The Top speculation was JPY , the most undervalued currency from the top 5 , rose 20Y or  14% ,Eur up 5% and all other emerging country currencys are simmilar up . like the THB.

 

depending how it goes forward in the US , is stocks in correction and risk off mode ,  than usd fall more. but i doubt there is a big correction ( bearmarket) around the corner , not jet , but medium term

 

[RichardColeman]

14 hours ago, DonniePeverley said:

Had it not been for Brexit the pound would be hovering around 60 Baht to the pound. Racists ruined it all. 

Hmm, must be just a coincidence that immediately the Labour party got into the UK it dropped from 47 to  44 ? 

[thesetat2013]

56 minutes ago, lapamita said:

The Baht strengh , have nothing to do with the local economy, its  a fall of the USD against all currencys.

Speculation on narrowing intrest rate  in US, risk off , Carytrades.

The Top speculation was JPY , the most undervalued currency from the top 5 , rose 20Y or  14% ,Eur up 5% and all other emerging country currencys are simmilar up . like the THB.

 

depending how it goes forward in the US , is stocks in correction and risk off mode ,  than usd fall more. but i doubt there is a big correction ( bearmarket) around the corner , not jet , but medium term

 

If anyone even noticed. The value of the USD began a downward trend as soon as Harris put herself into the elections. I can not say that this was the cause of the downward trend. But believe it has a lot to do with the devaluing of the USD.

[Stargeezr]

Wow volatile Baht, whats next?  I thought Thailand was a stable country. 555

[thesetat2013]

21 minutes ago, thesetat2013 said:

If anyone even noticed. The value of the USD began a downward trend as soon as Harris put herself into the elections. I can not say that this was the cause of the downward trend. But believe it has a lot to do with the devaluing of the USD.

Actually. In Jun. The baht was at almost 37 per USD. As soon as Harris announced she would run for president the value of the baht per dollar began to go down monthly until now which is 33 baht per dollar.

[chiang mai]

5 minutes ago, thesetat2013 said:

Actually. In Jun. The baht was at almost 37 per USD. As soon as Harris announced she would run for president the value of the baht per dollar began to go down monthly until now which is 33 baht per dollar.

Nonsense! USD value is driven by the Fed and interest rates, Baht volatility is a consequence of that, nothing whatsoever to do with US politics.

[lordgrinz]

1 hour ago, lapamita said:

depending how it goes forward in the US , is stocks in correction and risk off mode ,  than usd fall more. but i doubt there is a big correction ( bearmarket) around the corner , not jet , but medium term

 

Massive Debt, Debt interest payments now $1 Trillion per year, persistent inflation, and nobody is even remotely interested in reining in spending. When the bubble burst, it will be epic, but also very bloody.

[mfd101]

Question: Is there a set date on which the Fed will announce a decision one way or the other (as would happen in Oz)? or can it announce a decision whenever it feels like it?

[anchadian]

1 hour ago, RichardColeman said:

Hmm, must be just a coincidence that immediately the Labour party got into the UK it dropped from 47 to  44 ? 

And down we go....

43.9755

[thesetat2013]

9 minutes ago, chiang mai said:

Nonsense! USD value is driven by the Fed and interest rates, Baht volatility is a consequence of that, nothing whatsoever to do with US politics.

The timing suggests it plays a role in this as well. 

 

Political stability, spending, interest rates. Trade, investor confidence. All contribute. 

[Skeptic7]

1 hour ago, thesetat2013 said:

If anyone even noticed. The value of the USD began a downward trend as soon as Harris put herself into the elections. I can not say that this was the cause of the downward trend. But believe it has a lot to do with the devaluing of the USD.

It's The Fed and the looming, inevitable rate cuts on the horizon. Also a bit if overreaction due to uncertainty about whether they will cut .25% or .50% and how many cuts before the end of the year. 

[chiang mai]

1 hour ago, thesetat2013 said:

The timing suggests it plays a role in this as well. 

 

Political stability, spending, interest rates. Trade, investor confidence. All contribute. 

Nonsense, not even a remote factor, unless you're trying to connect unrelated factors for political points!.

[thesetat2013]

6 minutes ago, chiang mai said:

Nonsense, not even a remote factor, unless you're trying to connect unrelated factors for political points!.

Perhaps you need learn about google. 

A large number of factors influence currency value. Whether the U.S. dollar depreciates in relation to another currency depends on the monetary policies of both nations, trade balances, inflation rates, investor confidence, political stability, and reserve currency status. Sorry the bold. Copied and pasted that way. 

https://www.investopedia.com/articles/forex/051115/top-economic-factors-depreciate-us.asp#:~:text=A large number of factors,stability%2C and reserve currency status.

 

[chiang mai]

3 minutes ago, thesetat2013 said:

Perhaps you need learn about google. 

A large number of factors influence currency value. Whether the U.S. dollar depreciates in relation to another currency depends on the monetary policies of both nations, trade balances, inflation rates, investor confidence, political stability, and reserve currency status. Sorry the bold. Copied and pasted that way. 

https://www.investopedia.com/articles/forex/051115/top-economic-factors-depreciate-us.asp#:~:text=A large number of factors,stability%2C and reserve currency status.

 

Blah blah blah, all true but not remotely relevant in the example being discussed.

[retarius]

I wonder where the baht will be in 6 months' or a year's time. BOT seems reluctant to cut rates, even staring Srettha down. Powell meanwhile is happy the boost Harris's chances with a late cut, one that was telegraphed early. I'm betting he will do a 0.5% cut (0.25% is meaning less and won't improve Harris's prospects, but the outcome of tonight's debate will alter Harris's prospects one way or another.

Personally I cannot see Thailand's economy improving. Bad loans at banks worry me; the stupid giveaway worries me and I don't see it improving the economy significantly, but most of all car sales at home and abroad worry me....unless they improve foreign demand for baht will fade.

I'm going to make a huge bet on Yen. The baht vs yen has not changed in months, the yen is weak and the baht, overvalued in my opinion.....why should I not make this bet?

[daveAustin]

18 hours ago, DonniePeverley said:

Had it not been for Brexit the pound would be hovering around 60 Baht to the pound. Racists ruined it all. 

😞😞 Racists? What an—not untypical—idiotic comment. It’s this kind of damaging, immature rhetoric that has the uk so divided right now… if one doesn’t want local policy written up by unelected EU officials or questions mass illegal immigration, they are automatically racist. Where do you guys come from! School kids have more nous. 

 

The pound would not be that high btw, but I’m happy that the screwballs are feeling some pain. 

[harryviking]

4 hours ago, Stargeezr said:

Wow volatile Baht, whats next?  I thought Thailand was a stable country. 555

JOKER! 🤣🤣