Baht strength - How long?

[gejohesch]

I'm certainly not the first to wonder about the exchange rate THB against other currencies, but please bear with me!

 

I see the current rates:

1 USD = 32.4 THB   which is 9% down compared to 6 months ago

1 EUR = 36.2 THB   which is 7% down compared to 6 months ago

1 GBP = 43.3 THB   which is 5% down compared to 6 months ago

 

That's quite a drop in purchasing power within a relatively short time for a lot of western residents in Thailand, and for a lot of potential western tourists! Can someone explain what is going on and give a view on how long this trend might hold in the near-mid term?

[timendres]

What is going on is "macro economics" with bursts of speculation.

If it were predictable, I would be purchasing an ocean-side penthouse.

How long will this last? My "bet" would be at least until after the US election.

If I was to guess, I would expect it to bottom out in the 31 handle.

The chart looks a lot like the 3rd quarter of 2022.

 

[gejohesch]

16 minutes ago, timendres said:

What is going on is "macro economics" with bursts of speculation.

If it were predictable, I would be purchasing an ocean-side penthouse.

How long will this last? My "bet" would be at least until after the US election.

If I was to guess, I would expect it to bottom out in the 31 handle.

The chart looks a lot like the 3rd quarter of 2022.

 

Thanks!

What is "the 31 handle"?

[FlorC]

It seems THB follows the gold price since April.

Euro to Thai Baht Exchange Rate Chart | Xe

 

While in other currencies Gold is al lot up , it stays steady in THB.

Gold is going to keep going up , so will the THB.

 

The US elections may reverse both.

 

[chiang mai]

12 minutes ago, FlorC said:

It seems THB follows the gold price since April.

Euro to Thai Baht Exchange Rate Chart | Xe

 

While in other currencies Gold is al lot up , it stays steady in THB.

Gold is going to keep going up , so will the THB.

 

The US elections may reverse both.

 

Gold is priced in USD and THB is valued against USD also hence both will follow a similar path.

 

Agreed about the elections though, forecasts are for a reversal to 36..

 

[scubascuba3]

Since the prime minister got the boot, maybe they are buying baht selling currencies 

[gejohesch]

31 minutes ago, chiang mai said:

Gold is priced in USD and THB is valued against USD also hence both will follow a similar path.

 

Agreed about the elections though, forecasts are for a reversal to 36..

 

That would be 36 USD I guess, i.e. some sort of back where we were 6 months ago (or more)?

[chiang mai]

1 minute ago, gejohesch said:

That would be 36 USD I guess, i.e. some sort of back where we were 6 months ago (or more)?

Yes I think so.

[Everyman]

4 hours ago, timendres said:

What is going on is "macro economics" with bursts of speculation.

If it were predictable, I would be purchasing an ocean-side penthouse.

How long will this last? My "bet" would be at least until after the US election.

If I was to guess, I would expect it to bottom out in the 31 handle.

The chart looks a lot like the 3rd quarter of 2022.

 

 

It’s amazing the number of people who think they can predict exchange rates. The whole point of the Wise account is it lets one exchange between currencies whenever desired. But isn’t that just amateur currency trading? If people are really doing so well with that strategy they could be making a lot of money trading more formally on Forex markets or something. 

 

More likely, I think doing so provides a sense of gratification and that like gamblers people tend to only count their gains. Now some people will insist that really do have genuine gains this way. Great. Go trade Forex. 

[connda]

Wait until the 10,000 THB freebee handout to Thai voters gets priced in.  That 1/2 Trillion THB giveaway is going to devalue the THB.

[timendres]

4 hours ago, Everyman said:

It’s amazing the number of people who think they can predict exchange rates. The whole point of the Wise account is it lets one exchange between currencies whenever desired. But isn’t that just amateur currency trading? If people are really doing so well with that strategy they could be making a lot of money trading more formally on Forex markets or something. 

 

More likely, I think doing so provides a sense of gratification and that like gamblers people tend to only count their gains. Now some people will insist that really do have genuine gains this way. Great. Go trade Forex. 

 

Having traded forex for several years now, I can say that, for me, it is a frustrating market to trade. That is actually why I like it. It is quite different from the stock market in significant ways. Most who trade forex use very high leverage, which means you better have an edge and you better have exceptional risk management. Or you will fail for sure.

 

In terms of the exchange rate and how it affects us folks who transfer money into Thailand, I don't think anyone really believes they can predict the market with confidence. I think it is more like the lottery. People enjoy engaging in the process, and, they occasionally "win". What's not to like?

 

It is the folks who make the mistake of assuming that a favorable exchange will remain that way that are most at risk. Folks like me who are on social security need to plan for serious moves down in the exchange rate. The rate will typically "revert" back toward the long term average, but you need to be able to manage those months that you are going to come up short.  Best to squirrel away some baht while the rate is in your favor.

[spidermike007]

9 hours ago, gejohesch said:

Thanks!

What is "the 31 handle"?

She is 19 years old, height of 150 cm., and weighs 39 kilos. 

[KhunHeineken]

5 hours ago, Everyman said:

 

It’s amazing the number of people who think they can predict exchange rates. The whole point of the Wise account is it lets one exchange between currencies whenever desired. But isn’t that just amateur currency trading? If people are really doing so well with that strategy they could be making a lot of money trading more formally on Forex markets or something. 

 

More likely, I think doing so provides a sense of gratification and that like gamblers people tend to only count their gains. Now some people will insist that really do have genuine gains this way. Great. Go trade Forex. 

I think you missed the point that most are concerned about. 

 

That is, their meagre pension is contracting in value.  The purchasing power of their transferred funds is shrinking. 

 

Basically, their lifestyle may have to change. 

[Srikcir]

13 hours ago, gejohesch said:

quite a drop in purchasing power

Measured against other currencies can be confusing in terms of sustainable living.

COLA adjustments to annual income US Social Security has averaged about 2.6% over the past 20 years; it even remained stagnant (0.0%) in 2010, 2011 and 2016. Then 8.7% in 2023, 3.2% adjustment in 2024 and expected 2.56% for 2025. 

Compared to Thailand's lower inflation rates, US retirement in Thailand based on Social Security benefits in recent years appears generally advantageous. More so for US federal pensions based on the Civil Service Retirement System Civil that is adjusted annualy based on US Social Security COLA.

To quote Alfred E. Neuman: "What, me worry?" 

[thesetat2013]

4 hours ago, spidermike007 said:

She is 19 years old, height of 150 cm., and weighs 39 kilos. 

Sounds like my kind of woman. Young small and sexy.

[Bohemianfish]

14 hours ago, gejohesch said:

Thanks!

What is "the 31 handle"?

Perhaps: https://www.investopedia.com/terms/h/handle.asp

[john donson]

16 hours ago, gejohesch said:

I'm certainly not the first to wonder about the exchange rate THB against other currencies, but please bear with me!

 

I see the current rates:

1 USD = 32.4 THB   which is 9% down compared to 6 months ago

1 EUR = 36.2 THB   which is 7% down compared to 6 months ago

1 GBP = 43.3 THB   which is 5% down compared to 6 months ago

 

That's quite a drop in purchasing power within a relatively short time for a lot of western residents in Thailand, and for a lot of potential western tourists! Can someone explain what is going on and give a view on how long this trend might hold in the near-mid term?

 

the power of having your money in thailand and not having to care about exchange rate is not with this one

[bradiston]

7 hours ago, timendres said:

 

Having traded forex for several years now, I can say that, for me, it is a frustrating market to trade. That is actually why I like it. It is quite different from the stock market in significant ways. Most who trade forex use very high leverage, which means you better have an edge and you better have exceptional risk management. Or you will fail for sure.

 

In terms of the exchange rate and how it affects us folks who transfer money into Thailand, I don't think anyone really believes they can predict the market with confidence. I think it is more like the lottery. People enjoy engaging in the process, and, they occasionally "win". What's not to like?

 

It is the folks who make the mistake of assuming that a favorable exchange will remain that way that are most at risk. Folks like me who are on social security need to plan for serious moves down in the exchange rate. The rate will typically "revert" back toward the long term average, but you need to be able to manage those months that you are going to come up short.  Best to squirrel away some baht while the rate is in your favor.

Yes. Always look at worst case scenarios before making a move. What ifs are the backbone of intelligent trading, and decision making.

[bradiston]

6 hours ago, KhunHeineken said:

I think you missed the point that most are concerned about. 

 

That is, their meagre pension is contracting in value.  The purchasing power of their transferred funds is shrinking. 

 

Basically, their lifestyle may have to change. 

It's why I get my UK pensions paid into Wise. They remain in sterling until I need to exchange, and hopefully at a better rate. Plus the £ against the Philippines peso is way up at 74.98, and as I've elected to move there for 6 months of the year to get the pension rise and avoid Thai tax if it ever comes in, seems I've made a better decision than some I've made recently!

[newbee2022]

17 hours ago, gejohesch said:

I'm certainly not the first to wonder about the exchange rate THB against other currencies, but please bear with me!

 

I see the current rates:

1 USD = 32.4 THB   which is 9% down compared to 6 months ago

1 EUR = 36.2 THB   which is 7% down compared to 6 months ago

1 GBP = 43.3 THB   which is 5% down compared to 6 months ago

 

That's quite a drop in purchasing power within a relatively short time for a lot of western residents in Thailand, and for a lot of potential western tourists! Can someone explain what is going on and give a view on how long this trend might hold in the near-mid term?

I looked into my crystal ball, and I saw a better rate will come by actions of BOT. Soon.

[sammieuk1]

To answer your question fairly accurately it took 9 years for the £ to go from 43 to 47.5 and 2 months to return to 43 🤔

[J Branche]

Yes the weakening US dollar will effect the previously strong dollar now that the Fed is going to be cutting Interest rates, I believe the current lows are a bubble and it should get back to 34.5 a US dollar in the following months

[LALes]

8 hours ago, timendres said:

 

 

In terms of the exchange rate and how it affects us folks who transfer money into Thailand, I don't think anyone really believes they can predict the market with confidence. I think it is more like the lottery. People enjoy engaging in the process, and, they occasionally "win". What's not to like?

 

It is the folks who make the mistake of assuming that a favorable exchange will remain that way that are most at risk. Folks like me who are on social security need to plan for serious moves down in the exchange rate. The rate will typically "revert" back toward the long term average, but you need to be able to manage those months that you are going to come up short.  Best to squirrel away some baht while the rate is in your favor.

That's what is so great about having a dollar account here.  I can transfer between dollars and baht with the click of a mouse.  Good thing I was active during the recent runup to 37.  I built up the baht reserves and can wait out this current dip until it reverses again.

To my knowledge, foreigners can no longer apply for dollar accounts.

Edited 26 minutes ago by LALes

[bradiston]

6 minutes ago, LALes said:

That's what is so great about having a dollar account here.  I can transfer between dollars and baht with the click of a mouse.  Good thing I was active during the recent runup to 37.  I built up the baht reserves and can wait out this current dip until it reverses again.

To my knowledge, foreigners can no longer apply for dollar accounts.

I opened two with Krungthai just a few months ago. However, the costs of transferring from the US to Thailand were enormous. Swift only. I'll probably never use them. They were for a deal that died. But I have a Wise $ account and € and £ accounts. That's for sure the easiest way for me.

[ChaiyaTH]

Will be better again within next 3-6 months.

Edited 14 minutes ago by ChaiyaTH

[ChaiyaTH]

6 minutes ago, bradiston said:

I opened two with Krungthai just a few months ago. However, the costs of transferring from the US to Thailand were enormous. Swift only. I'll probably never use them. They were for a deal that died. But I have a Wise $ account and € and £ accounts. That's for sure the easiest way for me.

I just buy crypto from my euro or dollars and the sell them P2P on online exchanges for THB, this also makes it a domestic transfer that is not taxed. Aside from that it takes like 5-15 minutes on average and zero fees. Do that since years.

Edited 11 minutes ago by ChaiyaTH