£ Sterling Up Sh*t Creek?

[sonicdragon]

Yes, it's the current account surplus, mainly driven by exports, that is the force behind the appreciating baht. Bear in mind that the appreciation that we have seen over the last, say, 2 years, against the USD is actually rather mild in comparison to the appreciation of other currencies against the USD. Now that sterling is losing ground against the USD, while the USD current account surplus remains huge, and also bearing in mind that it takes quite a large *and* fast appreciation in the exchange rate to significantly affect exports, futher upward pressure on the baht vs the pound should be expected. Further local political, and global financial/geopolitical, turmoil obviously would ease the pressure.

don't you mean US current account deficit ? Also here is the reason for recent Baht strength

Thai Ctrl Bank: Recent Baht Strength Due To Exporter Selling

BANGKOK (Dow Jones)--The Bank of Thailand said Tuesday that the recent appreciation of the baht is mainly due to dollar selling by exporters, but the local currency has moved in line with regional peers since the beginning of the year.

The central bank recently intervened in the foreign exchange market to slow the baht's rise and to minimize the impacts on exporters, Assistant Governor of the Thai central bank Suchada Kirakul told reporters.

"We need to take care of the baht for exporters to remain competitive," said Suchada.

However, the baht's strength has helped defer an increase in domestic fuel prices amid rising global oil prices, she added.

In the onshore market, the baht was quoted at THB33.29 a dollar late in Asia Tuesday, compared with THB33.33-THB33.335 late Monday.

Meanwhile, the baht was quoted at THB29.70-THB29.85 a dollar in the offshore market, compared with THB29.73-THB29.83 a dollar late Monday in Asia.

-By Bangkok bureau, Dow Jones Newswires; 66 2266 0744; [email protected]

(END) Dow Jones Newswires

Yes, quite right - I meant the US current account deficit

[lannarebirth]

It's important to remember that 85%-90% of all foreign exchange is speculators. Often there's a move that can be attributed to a macro theme, but just as frequently, no one knows why a currency is moving. My guess is, if speculators can make it move, they will.

Anybody really think a 42 gal barrel of crude oil is really worth $100 or wherever higher it may go? About 50% of a barrel is recoverable as distilled fuel.

[GuestHouse]

Anybody really think a 42 gal barrel of crude oil is really worth $100 or wherever higher it may go? About 50% of a barrel is recoverable as distilled fuel.

Oil has an inflexible demand curve, so its not so much a question of 'Is Oil Worth $100 a barrel' and rather one of 'Do you want oil'.

Interestingly the debate on Oil that is winning ground in the US is not one of 'we need to use less because we can't afford to pay this price/its running out and going to get more expensive/its wrecking the environment'. But rather 'We need to be independent of foreigners for our energy usage'.

Meanwhile Oil is high, our clients are investing, I'm busey engineering and the world goes around.

But anyway, that's an asside, except pay rises are good again this year so a few percent slip in exchange rates is even less of a problem.

[fletchsmile]

Dollar today ar SCB atm 33.03 so I would think we will be in the 32 range pretty soon.

I hear lot of dollar guys talk about the good old days when it was 26 to one. Sounds great but they are not taking into account inflation and what they could purchased for 1K baht when it was at those levels.

I purchased my home, for 1.4 three years ago, they are now selling in the same complex same size for 2.2 and up. People are looking and thats Udon.

Five years ago I filled the tank on my bike for 150 Baht today 350

The good old days wouldn't bother me one bit if I had the same purchasing power as was available at that time. I really don't care what number they put on it, what I care about is what can I do with what I have and that is becoming les and less.

Might be tough year predictions are that inflation is going to rise this year, so costs up and income down

On the positive side, you've already done more than many. You bought a house = asset that will rise in value and in THB. You've also ensured your main accommodation cost won't increase.

The people who are worse off will be those with GBP only assets and no potential for rise in value, eg interest only on GBP cash.

As you say, people sometimes get too hung up about the smaller issue of current rates and will I buy at the "best rate" 65 or 70? Sure it's important, but the bigger issues as you point out include inflation, and ability to cope with much bigger changes in exchange rates. If GBP/THB moves to 35 or 100 in a few months/years, people won't be worrying too much whether they bought at 65 or 70.

For coping with inflation, one answer longer term is often equity exposures, as are index linked bonds. Depends on your risk apetitie though, as well as age/retirement/ income etc. I'm generally of the view most people should have some equity exposure as part of their savings/ investments. As someone gets older, and as they retire and have fewer sources of income, that exposure should get less though.

[Prakanong]

Anybody really think a 42 gal barrel of crude oil is really worth $100 or wherever higher it may go? About 50% of a barrel is recoverable as distilled fuel.

Oil has an inflexible demand curve, so its not so much a question of 'Is Oil Worth $100 a barrel' and rather one of 'Do you want oil'.

Interestingly the debate on Oil that is winning ground in the US is not one of 'we need to use less because we can't afford to pay this price/its running out and going to get more expensive/its wrecking the environment'. But rather 'We need to be independent of foreigners for our energy usage'.

Meanwhile Oil is high, our clients are investing, I'm busey engineering and the world goes around.

But anyway, that's an asside, except pay rises are good again this year so a few percent slip in exchange rates is even less of a problem.

Demand curves are elastic or inelastic not ""flexible" if we are talking the correct economic terms.

The elasticity of oil demand depends on the time period under consideration. In the short run it is inelastic but over the long run it becomes much more elastic.

[GuestHouse]

Demand curves are elastic or inelastic not ""flexible" if we are talking the correct economic terms.

What are you on about? The term "Inflexible Demand Curve" is widely used in ecconomics - Me thinks you're having a Pendantry Moment, so I'll forgive you for that.

[sonicdragon]

Demand curves are elastic or inelastic not ""flexible" if we are talking the correct economic terms.

What are you on about? The term "Inflexible Demand Curve" is widely used in ecconomics - Me thinks you're having a Pendantry Moment, so I'll forgive you for that.

Never heard the term "inflexible demand curve" before. Googling it gives 8 results. On the other hand "inelastic demand curve" gives "about 11,600".

As for pedantry, when discussing (in)elasticity of demand, reference should be made to what demand is (in)elastic to - quite often, and in this case I believe, price - ie "price (in)elasticity of demand". Also, since demand curves are often curved distinction should be made between the "point elasticity of demand" and the "arc elasticity of demand".

[BalthazarBeefheart]

Demand curves are elastic or inelastic not ""flexible" if we are talking the correct economic terms.

What are you on about? The term "Inflexible Demand Curve" is widely used in ecconomics - Me thinks you're having a Pendantry Moment, so I'll forgive you for that.

Never heard the term "inflexible demand curve" before. Googling it gives 8 results. On the other hand "inelastic demand curve" gives "about 11,600".

As for pedantry, when discussing (in)elasticity of demand, reference should be made to what demand is (in)elastic to - quite often, and in this case I believe, price - ie "price (in)elasticity of demand". Also, since demand curves are often curved distinction should be made between the "point elasticity of demand" and the "arc elasticity of demand".

Don't be hard on him - looking at his posts I guess English is a second language for him.

Cheers BB

[Naam]

Don't be hard on him - looking at his posts I guess English is a second language for him.

[GuestHouse]

English is my second language. Most people don't spot that. Well done.

[Prakanong]

Demand curves are elastic or inelastic not ""flexible" if we are talking the correct economic terms.

What are you on about? The term "Inflexible Demand Curve" is widely used in ecconomics - Me thinks you're having a Pendantry Moment, so I'll forgive you for that.

Sorry nothing to forgive as I was not having a pedantry moment and I was using the correct terms for the subject.

I do hope you now accept your mistake gracefully - google would have helped.

[GuestHouse]

I do hope you now accept your mistake gracefully

As you knew precisely to what I was referring there was clearly no mistake.

google would have helped

I suspect the hand of Wikipedia myself.

But you are right, you did find the term I used listed on Google.

Non of which distracts from my answer to the question 'Do we think a 42 gallon barrel of oil is worth $100 dollars?'

It doesn't matter what people think oil is worth, there is no alternative but to pay the price - Happy news for produces and those making money in the oil industry. And it is happy news, our office is stuffed full of smiling faces these days. Paid in increasing amounts of £terling they are all very happy about it.

[Prakanong]

I do hope you now accept your mistake gracefully

As you knew precisely to what I was referring there was clearly no mistake.

google would have helped

I suspect the hand of Wikipedia myself.

But you are right, you did find the term I used listed on Google.

Non of which distracts from my answer to the question 'Do we think a 42 gallon barrel of oil is worth $100 dollars?'

It doesn't matter what people think oil is worth, there is no alternative but to pay the price - Happy news for produces and those making money in the oil industry. And it is happy news, our office is stuffed full of smiling faces these days. Paid in increasing amounts of £terling they are all very happy about it.

Nah - not not Wiki and I did not have to use Google either - why can you just not accept that someone know's something you did not.

You are quick enough to jump on anyone elses mistakes but can not take it yourself.

[ray23]

So what is GBP doing today up or down?

[Naam]

So what is GBP doing today up or down?

yesterday http://www.scb.co.th/html/exchange/10012008_160000.htm

presently http://www.scb.co.th/html/exchange/10012008_160000.htm

[Naam]

And it is happy news, our office is stuffed full of smiling faces these days. Paid in increasing amounts of £terling they are all very happy about it.

you forgot to mention the jurisdiction in which they were paid. is it a safe one? are you sure that those "£terling" notes are not fake?

[kopite]

So what is GBP doing today up or down?

yesterday http://www.scb.co.th/html/exchange/10012008_160000.htm

presently http://www.scb.co.th/html/exchange/10012008_160000.htm

thats todays http://www.scb.co.th/html/exchange/bk-txtexchange.htm

[Ricardo]

Gulp ... 63.835 for notes, and 64.73375 for TT to Thailand. Hold onto your hats ! There will be lots of unhappy fellow-Brits here cutting back on spending.

My personal forecast is for <60, sometime in 2008, any other opinions ?

[GuestHouse]

you forgot to mention the jurisdiction in which they were paid. is it a safe one? are you sure that those "£terling" notes are not fake?

In term of safety 'loss of life and serious injury' our Thailand office outstrips all our other overseas offices. We are paid tax free in the UK so no fake notes - again Thailand is more renowned for that nonsense.

My personal forecast is for <60, sometime in 2008, any other opinions ?

I say >Bht60/£ throughout next year and the the swing throughout the year will be around +/-7 Bht/£ - as it always has been.

On that basis and given that the rate is around Bht65 now it could well dip below Bht60 but I doubt it will stay there.

-----

I'd be interested to hear where people think the alternative currencies they are investing in will be next year - just for the record like.

[Prakanong]

you forgot to mention the jurisdiction in which they were paid. is it a safe one? are you sure that those "£terling" notes are not fake?

In term of safety 'loss of life and serious injury' our Thailand office outstrips all our other overseas offices. We are paid tax free in the UK so no fake notes - again Thailand is more renowned for that nonsense.

My personal forecast is for <60, sometime in 2008, any other opinions ?

I say >Bht60/£ throughout next year and the the swing throughout the year will be around +/-7 Bht/£ - as it always has been.

On that basis and given that the rate is around Bht65 now it could well dip below Bht60 but I doubt it will stay there.

-----

I'd be interested to hear where people think the alternative currencies they are investing in will be next year - just for the record like.

As I said before 60 is a psycholigical number for me - if it does dip below that figure this year I am the same view as you - it will not stay there too long.

The Thai economy is not doing that well, domestic investment down, govt spending in limbo till a new govt formed, FDI under pressure from cmeptitirs like Vietnam, Singapore etc.

PS: How do you get paid in the UK tax free - mine had to go offshore with nothing being put into the UK. Pals had just enough put in to meet minimum bills.

[GuestHouse]

PS: How do you get paid in the UK tax free - mine had to go offshore with nothing being put into the UK. Pals had just enough put in to meet minimum bills.

It depends how your employer is set up tax wise and where they are domiciled. I am normally employed in our UK office but when assigned overseas I 'resign' from the UK and move to one of our 'offshore' offices, I then get paid by the offshore office to my UK account. My workplace, employer and duties I perform are all offshore - hence my income is tax free. At the end of an assignment I move back to employment by my home office.

It is of course a paper chase - but a wholly legal one.

[lannarebirth]

Above 1.90ish GBP/USD any outcome is possible with respect to GBP valuation, including new highs. Under 1.90ish GBP/USD the IT future is less positive.

[Prakanong]

PS: How do you get paid in the UK tax free - mine had to go offshore with nothing being put into the UK. Pals had just enough put in to meet minimum bills.

It depends how your employer is set up tax wise and where they are domiciled. I am normally employed in our UK office but when assigned overseas I 'resign' from the UK and move to one of our 'offshore' offices, I then get paid by the offshore office to my UK account. My workplace, employer and duties I perform are all offshore - hence my income is tax free. At the end of an assignment I move back to employment by my home office.

It is of course a paper chase - but a wholly legal one.

I always thought that if the money was paid into the UK you were taxed on it - thats why people keep it outside for at least a year after declaring domicile outside the UK?

[GuestHouse]

I always thought that if the money was paid into the UK you were taxed on it - thats why people keep it outside for at least a year after declaring domicile outside the UK?

I've worked overseas for 17 out of the last 19 years, my salary has always been paid into the UK. Apart from when I have worked in the UK I have never had my salary taxed in the UK.

I have of course paid tax where my assignment location dictates that I should (Italy being a case in hand) but I have a 'capping' agreement that limits my tax to no more than if I were in the UK.

This is all pretty standard for multinationals companies. As I have said before I think there is a lot of misguided information going around on Offshore Accounts.

[Prakanong]

I always thought that if the money was paid into the UK you were taxed on it - thats why people keep it outside for at least a year after declaring domicile outside the UK?

I've worked overseas for 17 out of the last 19 years, my salary has always been paid into the UK. Apart from when I have worked in the UK I have never had my salary taxed in the UK.

I have of course paid tax where my assignment location dictates that I should (Italy being a case in hand) but I have a 'capping' agreement that limits my tax to no more than if I were in the UK.

This is all pretty standard for multinationals companies. As I have said before I think there is a lot of misguided information going around on Offshore Accounts.

Yes, I pay my tax now in Singapore but what about if you were in a no tax location ie without the taxation agreement with the UK?

I thought that was when you had to keep your money offshore to avoid any tax in the UK

[thaiclan]

GBP is really getting a pounding (excuse the pun..ahem ahem). The offshore rate touched 57.3 today...ouch!

Woe betide anyone using their UK credit cards in Thailand this week :-(

So what is GBP doing today up or down?

[rgs2001uk]

I always thought that if the money was paid into the UK you were taxed on it - thats why people keep it outside for at least a year after declaring domicile outside the UK?

I've worked overseas for 17 out of the last 19 years, my salary has always been paid into the UK. Apart from when I have worked in the UK I have never had my salary taxed in the UK.

I have of course paid tax where my assignment location dictates that I should (Italy being a case in hand) but I have a 'capping' agreement that limits my tax to no more than if I were in the UK.

This is all pretty standard for multinationals companies. As I have said before I think there is a lot of misguided information going around on Offshore Accounts.

Yes, I pay my tax now in Singapore but what about if you were in a no tax location ie without the taxation agreement with the UK?

I thought that was when you had to keep your money offshore to avoid any tax in the UK

there are many expats working in the middle east, where there is no income tax, who are in that position and if they have informed the proper authorities and gone throught the correct channels will not be paying any tax.

i dont know if it is still true or not, but up until a few years ago, if you had been working overseas and not paying tax, you had to be out of the uk for at least one year, otherwise you would be taxed.

i remember one guy being sacked almost 10 months into a contract, it was cheaper for him to fly his wife out to cyprus for a 2 month holiday, wait for the one year to elapse then return to the uk, this way he avoided any tax liability.

no you do not have to keep you money offshore to avoid uk tax, unless the rules have changed recently, in which case i stand corrected.

as guesthouse says there are a lot of misguided/misinformed people ( btw prakhanong i am not having a swipe at you) out there.

my best advice to anyone is to have a chat with their bank manager when they go back to the uk on holiday, i never had an offshore account in all the years i was working tax free, in fact i found it easier to pop into my local branch for a chat personally with the manager, than talking to someone whom i had never met in the channel islands or iom and didnt know or understand my investment strategy.

[Prakanong]

I always thought that if the money was paid into the UK you were taxed on it - thats why people keep it outside for at least a year after declaring domicile outside the UK?

I've worked overseas for 17 out of the last 19 years, my salary has always been paid into the UK. Apart from when I have worked in the UK I have never had my salary taxed in the UK.

I have of course paid tax where my assignment location dictates that I should (Italy being a case in hand) but I have a 'capping' agreement that limits my tax to no more than if I were in the UK.

This is all pretty standard for multinationals companies. As I have said before I think there is a lot of misguided information going around on Offshore Accounts.

Yes, I pay my tax now in Singapore but what about if you were in a no tax location ie without the taxation agreement with the UK?

I thought that was when you had to keep your money offshore to avoid any tax in the UK

there are many expats working in the middle east, where there is no income tax, who are in that position and if they have informed the proper authorities and gone throught the correct channels will not be paying any tax.

i dont know if it is still true or not, but up until a few years ago, if you had been working overseas and not paying tax, you had to be out of the uk for at least one year, otherwise you would be taxed.

i remember one guy being sacked almost 10 months into a contract, it was cheaper for him to fly his wife out to cyprus for a 2 month holiday, wait for the one year to elapse then return to the uk, this way he avoided any tax liability.

no you do not have to keep you money offshore to avoid uk tax, unless the rules have changed recently, in which case i stand corrected.

as guesthouse says there are a lot of misguided/misinformed people ( btw prakhanong i am not having a swipe at you) out there.

my best advice to anyone is to have a chat with their bank manager when they go back to the uk on holiday, i never had an offshore account in all the years i was working tax free, in fact i found it easier to pop into my local branch for a chat personally with the manager, than talking to someone whom i had never met in the channel islands or iom and didnt know or understand my investment strategy.

This is interesting and I agree there is misinformation out there.

I have a pal working in Georgia at the moment and he was going to try and keep out of the UK for the required time but I am sure he thought he would have to be paid offshore as well.

I have never worked in a tax free location but have been paid some money locally in one location while the rest was paid offshore in some convoluted scheme to avoid both the very high local tax primarily and that money has never seen the UK either - its now in my local bank in singapore where i can go in and talk to my relationship manger personally - I like that just as you do.

[GuestHouse]

my best advice to anyone is to have a chat with their bank manager when they go back to the uk on holiday, i never had an offshore account in all the years i was working tax free, in fact i found it easier to pop into my local branch for a chat personally with the manager, than talking to someone whom i had never met in the channel islands or iom and didnt know or understand my investment strategy.

I agree entirely.

With respect to the 'required period out of the UK' - this is indeed one full tax year April 6 - April 5. If an individual works overseas for a part year and gets paid offshore, then returns to the UK before the year is out leaving the cash offshore he is committing tax evasion (unlike Tax Avoidance - Tax Evasion is a crime).

I did and explanation of this in another thread, and it is to be honest another topic.

[Prakanong]

my best advice to anyone is to have a chat with their bank manager when they go back to the uk on holiday, i never had an offshore account in all the years i was working tax free, in fact i found it easier to pop into my local branch for a chat personally with the manager, than talking to someone whom i had never met in the channel islands or iom and didnt know or understand my investment strategy.

I agree entirely.

With respect to the 'required period out of the UK' - this is indeed one full tax year April 6 - April 5. If an individual works overseas for a part year and gets paid offshore, then returns to the UK before the year is out leaving the cash offshore he is committing tax evasion (unlike Tax Avoidance - Tax Evasion is a crime).

I did and explanation of this in another thread, and it is to be honest another topic.

Good job I took the job in Singapore and not either of the two offered in England then - I would have been comitting tax evasion out of ignorance which is no defence!