Analysts Predict Baht Decline if Trump Wins US Presidency

[webfact]

File photo courtesy: Wikipedia

 

Thailand's baht is expected to depreciate further amid continuing capital outflows leading up to the US presidential election next month. Kasikorn Research Centre (K-Research) forecasts that if Republican candidate Donald Trump secures victory, the baht could potentially trade below 34.50 against the dollar.

 

The baht recently fell to 33.84 against the dollar, marking its lowest level in over six weeks. This comes as other regional currencies also weakened, impacted by stronger US dollar performance.

 

Kanjana Chockpisansin, K-Research's head of research for banking and financial sectors, explained that outflows from Thailand's stock and bond markets are occurring, bolstered by the dollar's strength due to rising US bond yields. The US Federal Reserve has indicated a gradual interest rate cut, further supporting the dollar.

 

On Wednesday, US 10-year Treasury yields peaked at 4.26%, the highest since late July, fueled by concerns over bond market pressures linked to a contentious November election.

 

"If Mr. Trump wins, the potential increase in government spending or borrowing could complicate US inflation reduction efforts, impacting the Fed's rate cut path," noted Kanjana. Such dynamics bolster the dollar, affecting Asian currencies like the yuan.

 

Despite these factors, K-Research continues to foresee a 0.25% reduction in US rates at each remaining Fed meeting this year, in line with Kasikorn Bank's stance.

 

Meanwhile, Thailand's Monetary Policy Committee (MPC) is likely to hold domestic policy rates at its December meeting following a recent 25-basis-point reduction. "The MPC decisions are more likely to reflect Thailand’s own economic conditions rather than mirroring Fed actions," Kanjana added.

 

Kavee Chukitkasem from Pi Securities observed ongoing fund withdrawals from the Stock Exchange of Thailand (SET) amid election uncertainties and institutional investors viewing the SET's current price-to-earnings ratio as expensive, reported Bangkok Post.

 

"Election uncertainties are steering investors away from riskier assets toward safer holdings like the dollar and gold. Nonetheless, historically, stocks tend to recover post-election, regardless of the outcome," Kavee concluded.

 

-- 2024-10-26

 

 

[nauseus]

 

 

How are rate cuts supposed to support the dollar? Why does K Bank reckon that Trump will spend more than the Dems?

 

Hopeless analysis. 

[daveAustin]

Let’s hope he wins then. We could all do with that extra 0.66 😂

Baht is still WAAAAYY overpriced. The real value (yes it is propped up—look who’s moving monies around) is somewhere around 40. 

[chiang mai]

24 minutes ago, nauseus said:

 

 

How are rate cuts supposed to support the dollar? Why does K Bank reckon that Trump will spend more than the Dems?

 

Hopeless analysis. 

Keeping rates high when inflation is low, constraints economic growth. USD will only benefit from high rates if inflation remains high.

[G_Money]

Look up in sky!  Is it a bird?  No!

 

Is it a plane?  No!

 

The sky is falling!  Again.

 

If a baht or two determines your financial well being in Thailand, one has bigger issues.

[mdr224]

Are these analysts thai people? Their record of predicting stuff isnt too good ive noticed

[TheAppletons]

1 hour ago, nauseus said:

 

 

How are rate cuts supposed to support the dollar? Why does K Bank reckon that Trump will spend more than the Dems?

 

Hopeless analysis. 

 

  Without attempting to get into the politics of the US election:

 

  1.  The article states the US Federal Reserve will "gradually" cut rates.  In other words, the previously expected tranche of consecutive rate cuts may not materialize.  This doesn't necessarily "support" the dollar but it slows the weakening of the dollar that would occur if the Fed continued on their previously expected course of action.

 

  2.  When looking at what candidate Trump has proposed, it's not the spending side of the equation that's of "concern" to some, it's more the revenue side.  He has proposed eliminating taxes on tips, overtime pay, and Social Security payments.  That means less revenue, so even flat spending results in a greater deficit, if those things were to happen. He would also like to continue with the tax cuts he achieved during his Presidency, which are set to expire in 2025.  That would also reduce incoming revenue.  Add to that his tariff proposals (generally inflationary in economic theory) and we're back to higher interest rates for longer.  

 

  (Disclaimer: I am not voting for either candidate and this post is in no way intended to reflect a preference or dislike for either of the US presidential election candidates.)

[Yagoda]

I only play in small amounts so the difference between 33.5 and 34.1 is negligible, especially on a 1500 baht short time.

[Smokey and the Bandit]

"if Republican candidate Donald Trump secures victory, the baht could potentially trade below 34.50 against the dollar."

 

So excellent news!!

[Guderian]

7 hours ago, webfact said:

Thailand's baht is expected to depreciate further

 

Hang about, it's the dollar and other Western currencies that have declined seriously against the Baht over the last six months, so where does the 'depreciate further' come from?

 

[neeray]

"Analysts Predict Baht Decline if Trump Wins US Presidency",  It's okay, all is good. I don't expect the baht will be declining.

[thailand49]

Noticed although nothing but speculation at this point nothing from the Trump haters. 

Leaders just looking for an excuse to weaken the baht since some are unhappy with its strength when that happens slowly it swings always the case to do with Econ 101🤣

[jesimps]

Now that's like having jam on both sides. A strong intelligent leader of the free world and having more baht in my pocket.

[lordgrinz]

After I get some definitive answers from the 2025-2026 tax remittance guinea pigs, I would probably only send money here if it reaches about 37 USD-BHT. So it's got a ways to go before I get excited.

[ignore it]

Hmm.

That could change the sentiments of some of the curmudgeons here.

[AdmiralKrag]

Another indirect benefit of a Trump administration.

 

There's absolutely no downside to Trump presidency vs Harris. None.

[AdmiralKrag]

6 minutes ago, lordgrinz said:

After I get some definitive answers from the 2025-2026 tax remittance guinea pigs, I would probably only send money here if it reaches about 37 USD-BHT. So it's got a ways to go before I get excited.

37

 

You've obviously a local income stream and my second venture not been here long. 37 lol.

[khunpin]

Just another reason NOT to like that criminal. 

[AdmiralKrag]

13 minutes ago, thailand49 said:

Noticed although nothing but speculation at this point nothing from the Trump haters. 

Leaders just looking for an excuse to weaken the baht since some are unhappy with its strength when that happens slowly it swings always the case to do with Econ 101🤣

 

The article is pure speculation beyond the speculation Trump will win. If Thailand wanted to depreciate the baht there are numerous sure fire ways. Your premise is faulty.

[john donson]

is it a good thing or a bad thing ?

 

if trump brings more jobs back to usa (loooooooooooooool)

 

in stead of cheap labor from this region

[lordgrinz]

1 minute ago, AdmiralKrag said:

37

 

You've obviously a local income stream and my second venture not been here long. 37 lol.

 

I could have had over 37 at the beginning of the year, but decided to hold off all remittances until we find out where taxes here in Thailand go for expats. Maybe the end of 2025 or sometime in 2026. Been here for 8 years now, usually use Wise, for now I have some cash sitting in their Interest bearing account, for now it's sitting there waiting and growing.

[AdmiralKrag]

10 minutes ago, lordgrinz said:

 

I could have had over 37 at the beginning of the year, but decided to hold off all remittances until we find out where taxes here in Thailand go for expats. Maybe the end of 2025 or sometime in 2026. Been here for 8 years now, usually use Wise, for now I have some cash sitting in their Interest bearing account, for now it's sitting there waiting and growing.

 

Lol

 

Eight years is nothing, so I'll clue you in. When you can get 37 take it because those anomalies are rare in past 20 years

 

Thailand should depreciate. Use the money to sort public transport, footpaths and making highways safe. Lower thb would also help tourism. Trouble is the strong baht allows the crooks to send money abroad and big corporations to import at extremely favorable rates

 

You'll be taxed on worldwide income so it really doesn't matter whether the money is here or in Timbuktu

[lordgrinz]

1 minute ago, AdmiralKrag said:

 

Lol

 

Eight years is nothing, so I'll clue you in. When you can get 37 take it because those anomalies are rare in past 20 years

 

Thailand should depreciate. Use the money to sort public transport, footpaths and making highways safe. Lower thb would also help tourism. Trouble is the strong baht allows the crooks to send money abroad and big corporations to import at extremely favorable rates

 

I really don't have any current need to send anything, in fact, I want to avoid it for as long as possible. I've taken the stance of refusing to invest anything here, directly or indirectly. I see Thailand as a failed state, and the current environment as hostile to foreigners, not to mention internally unstable. So maybe send a little bit of play money, but that's it.

[Humpy]

Come on Donald, you can do it !

[thesetat2013]

5 hours ago, nauseus said:

 

 

How are rate cuts supposed to support the dollar? Why does K Bank reckon that Trump will spend more than the Dems?

 

Hopeless analysis. 

It is not the US spending that will decrease the value of the baht. It is the strengthening of the dollar that will happen when/if Trump wins the election that will make the baht value decrease. Yeah for those of us sending money from US to Thailand. 

[hotchilli]

8 hours ago, webfact said:

Thailand's baht is expected to depreciate further amid continuing capital outflows leading up to the US presidential election next month. Kasikorn Research Centre (K-Research) forecasts that if Republican candidate Donald Trump secures victory, the baht could potentially trade below 34.50 against the dollar.

Some people trying to look important and stay employed.

[wensiensheng]

5 hours ago, nauseus said:

 

 

How are rate cuts supposed to support the dollar? Why does K Bank reckon that Trump will spend more than the Dems?

 

Hopeless analysis. 

Trump spending commitments have already been assessed by independent US analysts by several trillion dollars. Fact.

 

higher spending usually boosts inflation, as do tariffs, and so the ruction path for US interest rates will be slower than currently anticipated.

 

Hence a stronger US dollar due to higher than currently anticipated US dollar interest rates.

[CFCol]

55 minutes ago, lordgrinz said:

After I get some definitive answers from the 2025-2026 tax remittance guinea pigs, I would probably only send money here if it reaches about 37 USD-BHT. So it's got a ways to go before I get excited.

I think you mean 37 baht to the dollar

[zepplin]

5 hours ago, Ben Zioner said:

Funny that, I thought that the vote of the undereducated, obese, pink expats in Thailand had been secured a long time ago. Therefore this headline is a waste of space.

You must be talking to yourself again !

[Chivas]

5 hours ago, daveAustin said:

Let’s hope he wins then. We could all do with that extra 0.66 😂

Baht is still WAAAAYY overpriced. The real value (yes it is propped up—look who’s moving monies around) is somewhere around 40. 

 

lol clueless

Thailand has one of the biggest foreign currency reserves in the world last time I checked they were 11th

If they didnt keep selling the currency on the open forex market deliberately to weaken it to keep in line with import/export requirements (and tourism) which they're perfectly entitled to do it would be around 30