Dollar/baht Don't Read Unless You Have A Interest

[ray23]

"Baht likely to weaken to 35 per dollar this year

By Jiwamol Kanoksilp

The Nation, Bloomberg

Published on July 30, 2008

While the US dollar is bottoming out, experts predict the baht will grow weaker, ending up about 35 to the greenback by the end of the year.

"The US dollar has bottomed out," Tim Condon from ING Wholesale Banking/Financial Markets in Singapore said yesterday.

He predicts the dollar will appreciฌate against the euro and the yen, while the baht could fall further, depending on confidence.

ING said the baht was expected to fall to 34.15 to the dollar in the third quarter before appreciating to 33.85 in the fourth quarter. ING predicts the baht will rise to 33 to the dollar next year, but Satian Tantanasarit, executive vice president of TMB Bank, predicts the baht will appreciate to 35 to the dolฌlar this year.

"I agree the dollar has been weakฌening and is bottoming out," he said.

However, Condon believes the US Federal Reserve will likely cut its polฌicy rate 50 basis points during next year's first quarter after the worst of the inflation shock passes, while the European Central Bank in the same quarter will reverse its recent rateincrease policy.

Condon believes the fading of the oilprice shock will shift the European Central Bank's focus from inflation to growth. The US Fed funds rate is now at 2 per cent.

However, Satian believes the US central bank will maintain its rate and predicts the Bank of Thailand BOT will increase rates at least once more this year. The BOT's Monetary Policy Committee will meet again on August 27 for a ratemovement decision.

The baht fell for a second day yesฌterday on speculation that slowing ecoฌnomic growth and a deepening US housing slump would deter investฌments in emergingmarket assets.

The currency extended this month's losses after the BOT yesterday cut its economicgrowth forecast for this year to as little as 4.8 per cent, saying highฌer prices were squeezing consumption.

The Morgan Stanley Capital International AsiaPacific Index dropped as much as 2.3 per cent folฌlowing a slump on Wall Street amid concerns about widening creditmarฌket losses.

"The Thai stock market is down a lot, with foreign investors continuing to sell and thus damping demand for baht," said Chutima Nuphan, a curฌrency trader at TMB Bank in Bangkok.

"Last night, we saw steep drops on Wall Street. The baht is going to be on the weak side."

The baht declined 0.1 per cent to 33.49 to the dollar late yesterday morning. It has been the secondworst performer in the past three months among the 10 most active Asian curฌrencies outside of Japan.

The BOT raised its inflation foreฌcast for this year to 7.58.8 per cent, Assistant Governor Duangmanee Vongpradhip said yesterday. In April, it forecast an inflation rate of 45 per cent. The US$206billion (Bt6.91 trilฌlion) economy was previously forecast to expand as much as 6 per cent this year. Global funds sold about $1 billion worth of Thai stocks more than they bought from July 125. The Stock Exchange of Thailand Index fell as much as 1.7 per cent yesterday."

[ray23]

Is he right, one thing I do believe he is right about is fortune tellers may be a good as anything these days. We got some really sharp guys on this forum. Some very well educated in economics. But they are guessing as well, seems norm' really don't apply at the moment. I have followed this deligently for a couple of years now. As I was thinking in terms of investing for my famalies future. Haven't made a move yet. Everytime I think I have a clue I find out I don't.

I seems to me there will be a rebound point, to maximise your money you need to invest before that happens. But where the heck is the bottom

Today's Top Stories

Volatile times ahead

There is little good economic news on the horizon. Thailand's political quagmire seems intractable, opening up downside risks that are difficult to quantify.

--------------------------------------------------------------------------------

By Supavud Saicheua,

head of research, Phatra Securities Public Co, Ltd.

There is much confusion about how things might develop in Thailand in the coming months.

At the risk of being wrong, I have identified three factors that I consider most important. These are, firstly, problems of US financial institutions which are again in the forefront. Inflation remains a worry for Asia and Thailand. Finally, the unpredictability of Thai politics has made the predictions of fortune-tellers as sought-after as the writings of political commentators.

How the US financial sector fares in the coming months will have an important bearing on the global economy. In the summer of 2007, the bursting of the US housing bubble caused financial damage to US banks because of high risk or "subprime" lending. Some thought that the damage would soon be contained, especially after various financial institutions made bold write-offs and aggressively sought new capital.

The generous participation of Sovereign Wealth Funds added to this confidence.

However, the emergency rescue of Bear Stearns in March this year made it clear that the problem has spread into various fixed income and derivative instruments.

The novel ways in which the US Federal Reserve made liquidity widely available to US financial institutions on top of the aggressive cuts in its policy rate from 5.25% to 2.0% meant that the situation was grim.

The latest financial emergency prompted the US Treasury to spearhead the rescue of Fannie Mae and Freddie Mac, two government-sponsored corporations (GSCs) that are too important to fail. The two GSCs guarantee or directly provide mortgage loans worth $5.2 trillion, nearly half the system-wide mortgages worth $12 trillion. They are highly leveraged with capital - only 1-2% of total assets. Such leverage is not a problem under normal circumstances given the perception (though not written in law) that GSCs are backed by the US government.

But with US home prices falling 15% and the prospect of more to come, the US Congress has no choice but to approve legislation that authorises the US Treasury to provide any amount of credit and equity that Fannie and Freddie may need, along with help from the Federal Reserve.

Approving a law authorising a "blank cheque" to rescue Fannie and Freddie has led to optimism that the worst may be over. Such a belief could prove premature.

Merrill Lynch now sees US GDP contracting by 2.5% in the 4Q08 and 2.3% in 1Q09. For all of 2009, Merrill Lynch sees a 0.5% contraction in US GDP, whereas others expect US GDP to expand.

The IMF's latest forecast sees the US economy growing 0.8% in 2009. The IMF considers its forecast "gloomy" because it sees global growth falling from 5.0% in 2007 to 4.1% in 2008 and weaker still to 3.9% in 2009.

Why will things not get better?

Merrill Lynch points out that US financial institutions have tightened credit significantly not just for home mortgages but for commercial mortgages, car loans, credit cards, etc.

Recently, Fannie and Freddie were the main source of additional lending for the system. The rescue of Fannie and Freddie, though dramatic, may not restore its ability to expand credit. Indeed, lending more when home prices continue to fall could prove difficult when it is clear that the bill for damages will have to be paid by US taxpayers.

Moreover, some analysts noted that the severe compression of US asset prices is likely to claim many more casualties, if past financial crises are a guide.

The Savings and Loans crisis of the late 1980s caused 1,500 US financial institutions to go under. The situation stabilised only after the establishment of the Resolution Trust Corporation to buy out and manage down bad assets.

So far, only six US financial institutions have failed, so it is feared that many more could follow suit in the coming months as the US economy heads towards recession.

Accordingly, futures markets now see inflation as less of a problem in developed economies. No US interest rate hike is expected until the yearend, while hopes of rate cuts in Europe are being revived.

The sharp fall in oil prices from $147 to $125 during the past two weeks likely reflects this increased pessimism as much as initiatives by US authorities to investigate speculation.

Meanwhile, foreign investors remain concerned about Asian inflation and the inability of our central banks to tighten monetary policy in a timely manner.

In sharp contrast to this, Asian governments and businessmen are more concerned about economic slowdown and therefore central bank tightening has been gradual and reluctantly accepted.

Asia's implicit peg to the US dollar increases the risk that Asians will find runaway inflation the unwelcome surprise for 2009.

US monetary easing risks increasing the dollar price of crude oil and other commodities, setting the global economy up for prolonged inflation, as was the case in the 1970s.

The correlation between the dollar price of crude oil and the dollar-euro exchange rate was 95% from January 2007 to July 2008. If the dollar depreciates to two US dollars to one euro, and if past correlation between oil and dollar/euro holds, the price of oil would be $219-233 per barrel.

Asia has been struggling to control inflation since 2007 and the pegging of its currencies to the US dollar increases the risk of inflation getting out of hand in 2009.

On the other hand, a US recession is necessarily deflationary. If it is severe and spreads, Asian inflation could be a minor concern in 2009.

But only one of these two scenarios is the correct one. It seems that the majority view favours the first scenario, but a slight shift is now taking place towards the second.

Further sharp reductions in oil prices could forewarn that the second scenario is becoming more likely.

Thailand's political instability means that the country's future growth is being diluted in two main ways.

First is the inability to undertake long-term economic reform and liberalisation. The Constitution Court's decision on Preah Vihear has impaired the country's ability to engage itself in the ongoing globalisation of the world economy.

In general, the government finds it difficult to push forward long-term investment projects because of general distrust and detailed oversight.

Second, any future returns expected from an investment project must be subject to a larger discount rate to reflect the increased risk that elected governments will come and go quickly in Thailand.

It is clear that the 2007 Constitution has many pitfalls and those wanting to amend it are being actively opposed.

Current political difficulties faced by this government means that its remaining lifespan could be measured in a matter of months.

The instinct that new elections may not resolve the underlying conflict is the right one.

The bottom line is that despite its lacklustre performance, the People Power party - or a reincarnation of it - may not see its seats in parliament dwindle. This is because the Democrats are likely to face difficulties in trying to win more seats in the populous North and Northeast.

Smaller parties such as Puea Pandin, Chart Thai and Matchimathipataya are at risk of being dissolved. If not, their lack of success in the last election could make it difficult for them to carry on.

But the return of PPP appears unacceptable to powerful groups in Bangkok. And the mechanics of what Thai academics call "judicial activism" and politics on the streets is likely to shorten the life of any elected government headed by populist leaders.

In conclusion, there is little good news on the horizon. Ironically, the sharper than expected slowdown in the global economy could help bring Asian inflation under control, allowing domestic expansion to offset the shortfall in global demand.

However, Thailand's political quagmire seems far more intractable, opening up downside risks for the Thai economy in a way that is difficult to quantify."

[Shotime]

If you believe what this guy Condom says, or what any of them say, you're just being manipulated. Economics is fortune telling. It's like betting on a fixed horse race. You just hope you bet on the horse that is fixed to win. How's that for cynicism? If Condom knew what was going to happen, he wouldn't be such a dick-head.

[lannarebirth]

I wouldn't say the dollar has bottomed, as does the guy in the article. I would say that it's once again reached a juncture where we're going to see whether or not it can move higher. It's 200 day moving average is about to go flat at the point of it's most recent high. If it can get through and hold that price level in the next 2-4 weeks it stands a good chance of moving higher. If it can't it's probably going to the 60's. I'm somewhat optimistic of it's chances.

Edited July 30, 2008 by lannarebirth

[ray23]

You know if I knew what to believe I would be out riding now, instead of staying home saving money

[cloudhopper]

It seems to me that both country's economies are going down the shitter and the exchange rate will only reflect which one is sinking faster.

[PeaceBlondie]

It seems to me that both country's economies are going down the shitter and the exchange rate will only reflect which one is sinking faster.

There you go, it's who comes in second place in the race to the septic tank.

[britmaveric]

Can't compare yank economy with thai economy. Like comparing a grain of salt to a planet.

[ray23]

Are any countries really doing that great, if so I guess I missed something. Even what were great performers a year ago seem to be being effected these days. The Vietnam Boom, was that to much to fast?

Hasn't the Chinese market been taking a hit?

India inflation seems to be on thier minds big time these days

Are things slowing in Australia?

Times are very different, these day in a very short period of time really.

It was interestign to see the figures coming out of the states today. Some areas were actually doing pretty good. But banking figures brought the total numbers down.

You know even during the depression there were people making fortunes, wonder how they did it?

[cloudhopper]

You know even during the depression there were people making fortunes, wonder how they did it?

Criminal activities, like Joe Kennedy - pretty much the same way they are doing it now I imagine.

[ray23]

Well lets see didn;t old Joe take the money adn run befoe people strted jumping form buildings. Pattaya excluded.

Or do we start making booze and hope for prohibition

[dclaryjr]

By Supavud Saicheua,

head of research, Phatra Securities Public Co, Ltd.

<b>On the other hand</b>, a US recession is necessarily deflationary. If it is severe and spreads, Asian inflation could be a minor concern in 2009.

It's quotes like these that made Truman long for a one-armed economist!

[Naam]

If you believe what this guy Condom says, or what any of them say, you're just being manipulated. Economics is fortune telling.

i second that!

[VegasVic]

Are any countries really doing that great, if so I guess I missed something. Even what were great performers a year ago seem to be being effected these days. The Vietnam Boom, was that to much to fast?

Hasn't the Chinese market been taking a hit?

India inflation seems to be on thier minds big time these days

Are things slowing in Australia?

Times are very different, these day in a very short period of time really.

It was interestign to see the figures coming out of the states today. Some areas were actually doing pretty good. But banking figures brought the total numbers down.

You know even during the depression there were people making fortunes, wonder how they did it?

"Hasn't the Chinese market taken a hit?" Now that might just be the understatement of this young century The Chinese market is down over 60% (hmm, seems to me that someone predicted this would occur a year ago?) from its highs a year ago and the Olympic hangover effect is still many weeks away! I find it kind of funny that the Chinese stock market "hit" is more than 3 times greater than the 'hit" that the U.S. market has had, and yet whenever I check in here in TV land it seems that all I hear is how the U.S. economy is on the verge of a depression (it's actually not even in a recession as of yet and very well might not enter into one) and the U.S. dollar will never recover ect. ect. ect.. I am here to tell you good folks that there is one place where the U.S. dollar still goes a long way, "The Good Old U.S.A.", and Europeans and Canadiens who have tourist related businesses are finding out that fact this summer, and Asians and Austrailians will find out this winter! The U.S. may very well be the most resilient country in the world, and a year or two from now there will be many here that will be wishing that they bought into the U.S. market during this period as they would not only haved reaped the rewards of incresing equity prices, but also the double killing as the dollar appreciates in value Just a thought sports fans! Now back to some good ole dollar bashing!!! P.S. By the way Joe Kennedy was a bit of a slug and an opportunist, but he made most of his money well before the great depression

[ray23]

It was interesting They had I believe the CEO of one of the big banks here in Thailand on Bloomberg this morning. It was a phone intreview. But, he had to be smiling I don't think he answered one question directly.

Since they were on the subject of exports, he was welcoming a bit of baht appreciation. On the other hand not real happy about the BOT raising interest rates.

Two things came out the intreview that 27% increase in exports 17% was rice and that price is falling. The other that I had no idea about. A big portion was from exporting processed fuel to other countries.

I find that interesting, on one hand they are trying to cut costs of fuel here and profiting by exporting it at the same time. No wonder PTT is doing well these days.

What effect is the fact that both of those commodities in those areas currently are coming down in price?

[Gary A]

There are simply too many unknowns here. If we knew which way the baht was going to go, we could make a lot of money. I worry about another coup more than anything else. The next one will likely be bloody and what will that do to the baht? As it stands, I have to make a 900,000 baht transfer next week. I do have the option of using an income statement rather than the 800,000 baht balance for my retirement visa. I'm just not crazy about having to go to Bangkok to get the statement. As it stands, I'm perfectly happy to get nearly 33.5 baht to the dollar. The "WHAT IF" does bother me.

[ray23]

Well one thing about it, your in a perfect place to ride the next one out. I used to think the same about Udon until a few days ago.

They did hit the guy with politics but he was really smart enough not to answer that one

[ray23]

I didn't know there was a change in the board

Thai FX policy has failed to keep baht stable

source: Reuters Jul 30, 2008

BANGKOK, July 30 (Reuters) - The foreign exchange policy of Thailand's central bank has failed to keep the baht stable relative to other Asian currencies, Finance Minister Surapong Suebwonglee told a business seminar on Wednesday.

"Nobody has a problem with foreign exchange rates as long as there is stability. But ours is still swinging compared with other countries, which have good management, so we need to have stability," Surapong said.

He attributed the baht's instability largely to increased volatility of foreign capital flows, which he said required more efficient currency management.

At 0407 GMT, the baht <THB=TH> was trading at around 33.48 baht to the dollar, down from 33.44 at Tuesday's close.

It briefly fell to 33.52 per dollar and steadied after intervention by the central bank, dealers said.

They said the currency was under pressure due to political uncertainty and the appointment of a new Bank of Thailand board by the government on Tuesday.

Some analysts said the make-up of the board might lead to a watering down of the central bank's efforts to fight inflation.

Surapong did not directly criticise the Bank of Thailand on Wednesday, but he has criticised it in the past for raising interest rates by 25 basis points to 3.5 percent this month, its first rise in two years.

Surapong, who has pushed pro-growth policies, has said raising rates might not be the best way to deal with inflation running at a 10-year high.

Inflation would slow in the second half as oil prices were easing, he said on Wednesday.

His comments and policy priorities have raised concerns about political interference in monetary policy and have led to speculation that the government wanted central bank Governor Tarisa Watanagase to resign.

The new central bank board, which has the power to change the composition of the central bank's Monetary Policy Committee, has raised concern as the new members, making up half of the board, are reported to be close to Surapong.

However, Surapong said the new board would be able to operate independently.

"The board will be independent, but we want to see cautious management of monetary policy," he told reporters.

(Reporting by Trisanat Kongkhunthian; Writing by Orathai Sriring; Editing by Alan Raybould)

_________________

.

[ray23]

You know If I didn't have so much faith in the governemnt it would sound to me like they have just turned the keys over to the vault, to some people who may nave some very different ideas

Public debts at 36.10% of GDP in May

source: The Nation

Public debts as of May stood at Bt3.4 trillion or 36.10 per cent of gross domestic product, according to the Public Debt Management Office.

The office's statement showed that of total, Bt2.2 trillion were direct loans to government agencies, Bt949.6 billion being guaranteed loans to non-financial state enterprisers, Bt91.5 billion to financial state enterprises, Bt157.3 billion to the Financial Institutions Development Fund, and Bt20.97 billion to other state agencies.

Compared to April, the public debts were down by Bt1.2 billion. While financial state enterprises and the FIDF's loans dropped month on month, the government's direct loans as well as the loans to non-financial state enterprises rose.

_____________________________________________________

Financial Institutions Businesses Act comes into force

The Nation July 28, 2008

Weak prudential regulations stemming from inappropriate and outdated laws contributed partly to the financial crisis of 1997.

After 10 years of waiting for legislative endorsement, Thailand will welcome the Financial Institutions Businesses Act (FIBA) on Sunday. Now, we have a law that encompasses more complex business transactions of financial institutions and, more importantly, eliminates various drawbacks of previous financial institution laws in use since 1962.

Among several important aspects of the FIBA, which was enacted in February, five core objectives have been emphasised. They are designed to enhance prudential measures, increase the efficiency of the financial system, encourage integrity and good governance, promote fairness and maintain a sound macro-prudential environment.

The ultimate goals are to strengthen financial institution stability, prevent financial crises and enhance competitiveness.

Although most of the prudential regulations under the FIBA are not entirely new for financial institutions, consolidated supervision regulations, with legal enforcement, will be introduced for the first time. They are expected to correct numerous flaws of previous laws.

Under the new consolidated supervision regulations, financial institutions will be supervised collectively. This means that they have to identify their subsidiaries and affiliated companies, such as credit card or leasing companies, as well as seek approval for their group's structure from the Bank of Thailand.

Supervision from a group-wide perspective will let regulators fully and legally assess group risk exposures that may not be completely captured by supervision on a stand-alone basis.

Key regulations include capital-adequacy requirements, intra-group transactions and large exposures.

This new mode of supervision will enhance prudence in examination to reflect the financial positions of financial groups more accurately.

The FIBA has been made more responsive to more complex financial transactions, a more rapidly changing financial environment and more sophisticated financial instruments, such as structured products and credit derivatives.

Potential financial crises will also be more effectively prevented through prudential measures that focus on the responsibilities of boards of directors and senior management as well as on risk-management functions.

Financial institutions with high-risk profiles may be required to set aside extra capital reserves to cushion against their risk exposures.

Early warning systems have also been developed to promptly signal regulators about the status of a financial institution.

The central bank can now consider and approve the composition of directors as well as the checks-and-balances systems of financial institutions. The directors will also be required to participate actively, exercise due care and comply with applicable laws and regulations.

The FIBA will also improve consumer protection through rules focusing on information disclosure, especially for interest rates and fees. Sufficient information and market discipline will be powerful tools for consumers to use in dealing with financial institutions.

Overall, this new law will increase the safety and soundness of financial institutions and the financial system as a whole.

This is vital because a strong and efficient financial sector is a crucial force for advancing economic development and people's welfare.

__________________________________________________

BBL frets over rising NPLs in Vietnam

source: Bkk Post July 29 2008

[Shotime]

You know even during the depression there were people making fortunes, wonder how they did it?

Criminal activities, like Joe Kennedy - pretty much the same way they are doing it now I imagine.

Most of them made their money in criminal activity. Joe Kennedy was a rum runner. That's when the USA was great. Before child labor laws, unions, human rights, etc. Business ran the country, not the other way around. Why do you think China's doing so good?

Here in Thailand, it's the same thing, more or less. How do you think Thaksin made (stole) all his money?

[ray23]

Just in the short time I have started this thread the rates have been up and down like a yoyo, how anyone could reasonably predict anything is beyond me

[VegasVic]

There are simply too many unknowns here. If we knew which way the baht was going to go, we could make a lot of money. I worry about another coup more than anything else. The next one will likely be bloody and what will that do to the baht? As it stands, I have to make a 900,000 baht transfer next week. I do have the option of using an income statement rather than the 800,000 baht balance for my retirement visa. I'm just not crazy about having to go to Bangkok to get the statement. As it stands, I'm perfectly happy to get nearly 33.5 baht to the dollar. The "WHAT IF" does bother me.

I think the really big "WHAT IF" that should bother everyone in the LOS that goes unspoken but is on most Thai minds, farang minds and investors minds is the eventual passing of HRH. The vacuum left when this occurs will be monumental, and in all likelyhood Thailand could very easily become a military dictatorship with no regal figurehead to calm the peoples minds and intervene in critical matters of state. This certainly is not a subject that most Thais will entertain but it will occur(hopefully not for many more years) and the aftermath could be very dicey for Thailand and anyone with investmenst in Thailand.

[chiang mai]

I wouldn't say the dollar has bottomed, as does the guy in the article. I would say that it's once again reached a juncture where we're going to see whether or not it can move higher. It's 200 day moving average is about to go flat at the point of it's most recent high. If it can get through and hold that price level in the next 2-4 weeks it stands a good chance of moving higher. If it can't it's probably going to the 60's. I'm somewhat optimistic of it's chances.

I have no idea whether it has or has not, but I listen to/read people people who claim they do know. One of my favorites is RBS (UK) because they have a track record of being right far more often than not. RBS, if their quarterly exchange rate/interest rate forecast is anything to go by, is calling the bottom on USD versus GBP/EUR and JYN - where GBP/USD goes, GBP/THB follows.

[lannarebirth]

I wouldn't say the dollar has bottomed, as does the guy in the article. I would say that it's once again reached a juncture where we're going to see whether or not it can move higher. It's 200 day moving average is about to go flat at the point of it's most recent high. If it can get through and hold that price level in the next 2-4 weeks it stands a good chance of moving higher. If it can't it's probably going to the 60's. I'm somewhat optimistic of it's chances.

I have no idea whether it has or has not, but I listen to/read people people who claim they do know. One of my favorites is RBS (UK) because they have a track record of being right far more often than not. RBS, if their quarterly exchange rate/interest rate forecast is anything to go by, is calling the bottom on USD versus GBP/EUR and JYN - where GBP/USD goes, GBP/THB follows.

That's what I think too, but on this forum I try to limit my posts to "where we're at now" postings and maybe give probablistic outcomes based on "where we're at now". The GBP:$USD remains in the same bearish pattern that we've discussed for a year now.

[glyph]

"Baht likely to weaken to 35 per dollar this year"

Have you checked to see how accurate this person's predictions have been in the past?

[VegasVic]

I wouldn't say the dollar has bottomed, as does the guy in the article. I would say that it's once again reached a juncture where we're going to see whether or not it can move higher. It's 200 day moving average is about to go flat at the point of it's most recent high. If it can get through and hold that price level in the next 2-4 weeks it stands a good chance of moving higher. If it can't it's probably going to the 60's. I'm somewhat optimistic of it's chances.

I have no idea whether it has or has not, but I listen to/read people people who claim they do know. One of my favorites is RBS (UK) because they have a track record of being right far more often than not. RBS, if their quarterly exchange rate/interest rate forecast is anything to go by, is calling the bottom on USD versus GBP/EUR and JYN - where GBP/USD goes, GBP/THB follows.

It appears that RBS made a great call, I hope you bought some Dollars or at least Dollar denominated assets! Actually Goldman Sachs made the same call earlier this year, they called for the Euro to drop to around $1.35 before years end and if memory serves the pound to the low $1.80's. I have seen other forecasts for the pound as low as $1.65/Dollar, which seems a bit extreme, however if this trend does continue throughout 2009 it is certainly possible. The Dollars downturn over the last 5 years has had a great deal of artificial elements to it, so as this situation begins to unwind I would imagine that the Dollars comeback will be much stronger than it normally might have been. Also the timing of the dollars return to grace is running paralell to the U.S. presidential elections and no matter who is elected it will be good for the Dollar to have Bush out! Keep an eye on the Dollar/Yen relationship, should the Dollar move north vs. the Yen but at the same time the Dollar/Euro remains static, then sell all the Euros you can, you will make a killing As far as the TB goes it will eventually weaken vs. the Dollar, but the BOT has so far been very public about making this an orderly move with its currency (and they do have some ammo in the short run), the baht will likely gravitate back to the 42-43 area unless the wheels come off the bus in the Thai economy, then all bets are off!

[Lost in LOS]

saw a bunch of " experts" on CNBC. they said the dollar wont be strengthening by itself anytime soon but the other currencies such as the euro will be weakening. I don't understand much of this before you flame me, but thats what they said

[Naam]

It appears that RBS made a great call, I hope you bought some Dollars or at least Dollar denominated assets! Actually Goldman Sachs made the same call earlier this year, they called for the Euro to drop to around $1.35 before years end and if memory serves the pound to the low $1.80's. I have seen other forecasts for the pound as low as $1.65/Dollar, which seems a bit extreme, however if this trend does continue throughout 2009 it is certainly possible.

Goldman Sachs seem to be the only ones left to call USD/EUR 1.35 end 2008. a fact remains that GS -unisono with Credit Suisse, UBS and several other multinationals- made similar calls starting THREE YEARS ago. now most of them have piped down

when USD/EUR strengthened in 2005 from ~1.36 to ~1.18 most "anal"-ysts (including GS) trumpeted "PARITY IN 2006!" at that time Credit Suisse "anals" went even further and forecasted 0.95 at end of 2006.

note to myself and other TV-members: if a currency analyst applies for the job to check chlorine contents and pH value of your pool water... DO NOT HIRE HIM! and that goes for mowing the lawn too

Edited August 10, 2008 by Naam

[Naam]

saw a bunch of " experts" on CNBC. they said the dollar wont be strengthening by itself anytime soon but the other currencies such as the euro will be weakening. I don't understand much of this before you flame me, but thats what they said

i wouldn't dare to flame you Jimmy as you might serve me tap water instead of Sherry next week a tendency and outlook for a strengthening dollar does indeed exist. simple reason: €UR interest rates are pointing down, USD interest rates will have to go up sooner or later. i know that sounds like good news for you but... don't expect miracles!

[lannarebirth]

It appears that RBS made a great call, I hope you bought some Dollars or at least Dollar denominated assets! Actually Goldman Sachs made the same call earlier this year, they called for the Euro to drop to around $1.35 before years end and if memory serves the pound to the low $1.80's. I have seen other forecasts for the pound as low as $1.65/Dollar, which seems a bit extreme, however if this trend does continue throughout 2009 it is certainly possible.

Goldman Sachs seem to be the only ones left to call USD/EUR 1.35 end 2008. a fact remains that GS -unisono with Credit Suisse, UBS and several other multinationals- made similar calls starting THREE YEARS ago. now most of them have piped down

when USD/EUR strengthened in 2005 from ~1.36 to ~1.18 most "anal"-ysts (including GS) trumpeted "PARITY IN 2006!" at that time Credit Suisse "anals" went even further and forecasted 0.95 at end of 2006.

note to myself and other TV-members: if a currency analyst applies for the job to check chlorine contents and pH value of your pool water... DO NOT HIRE HIM! and that goes for mowing the lawn too

For the past several years the "trading desks" at these various banks have been contributing greater and greater sums to the company revenues. There are supposed to be "Chinese Walls" between the various departments but any thinking person knows that's all bullshit. If they have a pronouncement to make these days you can be sure one of their divisions has frontrun the announcement or is hoping the enhanced liquidity will allow them to extricate themselves from a position they hold.