Baht-uk Pound

[Naam]

If you look at the history of USD/THB it has gone from the peg level of 1.25 in 1997 its current 1.34, that's a gain of only 9 cents

9 cents ? :D

[yabaaaa]

over 56 baht per £ today whooping heck!!!

[tigerbalm]

With not much time left this morning (I'm off on holiday today) I seem to be having problems posting for some unexplained reason - I will however reply more fully when I get to where I'm going and will not leave this hanging. But in a nutshell, I see THB gaining against USD and GBP over time but not necessarily by similar amounts. If you look at the history of USD/THB it has gone from the peg level of 1.25 in 1997 its current 1.34, that's a gain of only 9 cents, expecting a strengthening of say 5 Baht to 1.30 over the next seven to ten years is entirely likely given the QE taking place in the US - that would put USD/THB in shooting distance of its old peg level. As for the balance needed to reach a 35 Baht Pound: well clearly the debt overhang from the current crisis will leave the Pound weakened - prior to the crash USD/GBP traded at 1.50, not too far away from where RBS predicts it will be at the end of this year!

As for the effects on tourism and exports: Thailand has shifted its focus away from USD over the past few years and in light of recent events I see them continuing along that course, as indeed will many other countries in the region - I also think that Thailand is likely to shift its export focus over time as the Asian market matures further. Let's not forget also we are talking about a time frame of seven to ten years and change over time is easy to absorb.

Shifted away from the USD to where? may i ask

I still think the US will be a prime target for any thing in the East what markets could Thailand sell to more competitively CHINA mmmm not sure about that INDIA mmm not sure about that but i suppose it depends on what they are trying to sell..pineapples may be.

[cmsally]

Of course as this all ties in to US$ vs THB, the rise in the pound is presumably tied to demise of GM and the rise in the markets.

Somehow can't help wondering whether Geithner volunteered to go to China or was summoned.

Apparently in a speech to Beijing Uni when he announced that China's investments in US bonds were safe, he was laughed at.

Be interestingly to see how things pan out in the next few weeks.

[wackysleet]

It's simply that when I read a thread you are there and I disagree with what you write in the main.

On previous threads I pointed why I felt your predictions were wrong, not just wrong but wholly wrong. Central to this is your belief is that the pound will fall to 35bt. You regarded this as a historical norm, in part accurate but only in as much as it was fixed at a particularly unrealistic price against the dollar with disasterous consequences. When challenged to provide figures you did not do so. Nor acknowledge the effect of inflation in eroding currency values- on this point I'm not so sure of relative diffs. myself.

Then we were given all sorts of reasons as to why powerhouse Thailand would motor through the recession leaving UK standing. They seemed to revolve around the notion that demand would pick up in Asia from other countries, but it is clear that all countries are in the mire, and Asia seems very dependent on the west for demand. Thailand's contraction in particular seems alarming, especially given that it is still an emerging market. And it's performance is weak anyway and has been for years.

You have taken many aspects and glorified them where Thailand is concerned and downplayed them where UK is concerned. Where you acknowledge a problem you simply dismissed it as trivial, eg, the decline in tourism, as if a few percent made no difference! I know this thread is about UK and Thailand, but you do seem to be oblivious to the plight of other countries. Sure the UK is in big trouble so is every major economy in fact some worse.

As far as I can see though the UK has awful public finances and the only storm could be a major breakdown if it fell in to a position of default, and indeed Moodys changed it's rating to negative. It's taken to be a shot across the bows and I think we can take it as read that public spending will be massively reduced in coming years. Thailand on the other hand seems to have balanced finances for the time being, but later not so.

I can't predict a rate and it is best if we all say we are guessing- yes guessing. I think it's also best to average out, in effect change money in chunks if poss.

Well my stalking friend I'm not sure that what you have written here is entirely accurate in as much as I don't recall you ever pointing out in any detail why you disagree with my earlier opinion - nor do I see the links I asked you to provide to support your claims nor do I see evidence to support your theory that the UK economy is better than some! But never mind, let's go back in time and start again shall we!! For the purposes of our disagreement on these matters let's refer to the following as my baseline post shall we, that way we have a point of reference:

In a separate thread some time ago a poster stated that he saw GBP strengthening to 80 Baht per Pound and I replied by way of contrast saying that over the next seven to ten years I see THB strengthening to around 35/40 per Pound. In the short term I said I see THB weakening to the mid 50's (+/- a 10% margin of error) and there after I see THB strengthening against the Pound. When asked why I was so bullish on THB I replied that I thought the UK economy would soon see a second tranche of falls in value and that the effects of QE and government debt would linger far longer and have a greater impact than the effects of the loss of tourists and exports would on the THai GDP - in summary I said I thought that Thailand would recover more quickly than the UK.

In respect of tourism: I said that the current 7% of GDP generated by tourism was not a huge number and that even if arrivals are down 50% for a twelve month period (which they are not), a 50% drop in tourism revenues would only be temporary and would likely be made up again by tourists from other destinations over time - regardless, 3.5% of GDP remains a small number.

Going into the recession I said that Thailand was better positioned than many countries, mainly as a result of the discipline instilled into it by the IMF following the 1997 crash. Foreign reserves are at an enviable level of circa 120 bill (the UK I think is around 17 bill), government borrowings is placed mainly with their regional trading parties and their own national banks (not the other way around as in the case of the UK!) and their central bank is well respected (not like the BOE unfortunately). Indeed, I read a survey in the past week that showed the top twenty countries most likely to be the LEAST impacted by the global recession and six of those countries were in Asia with Thailand being around number fourteen as I recall.

As for exports: I said that less around 50% of Thailands exports are to regional destinations and it is mainly the other 50% to the west that has been effected as a result of the recession. I said that I see Thailand's economy picking up again quickly once the latter 50% starts to grow again and that there will little overhang on the economy resulting from gearing up once again or from social readjustment (unemployed workers in Thailand will return to their villages and farms to pursue other work but will return to employment quickly as soon as it becomes available - western cultures tend to rely heavily on social support from central government which in many cases is a disincentive to return to full time paid employment quickly, case in point the percentage of the UK population who exists on benefits).

AS for historic exchange rates: what I said was that there has been an emotional attachment by many to a GBP/THB exchange rate of 70 for many years but that rate does not reflect fair or true value. Prior to 97 I said that the rate was around 35, or about 20 to the USD as I recall and that rate was closer to the real value. But there is no peg between THB and USD (as in the case of say Hong Kong where HKD is pegged to USD) and the only real link between the two currencies lies in the fact that BOT export bills are settled in USD. Today the BOT manipulates its currency to try and ensure a) there are no wild and sudden swings, and to ensure that THB remains competitive against a basket of regional currencies.

Now, I think that's pretty much all I have said previously on this subject but no doubt you will tell me if I have missed anything. What I have also said is that I am not an expert on economics but the above represents my opinion and am quite happy for my opinions to be challenged constructively. Your task now is to tell us all why my opinion is dangerous, where it could cost people money and if you like, why you disagree (but with supportive links only this time or your credibility might take a hit).

I do not pretend to be an expert and am always willing to listen to others but in my ignorance could you explain how you arrive at the assumption that Thailands 50% of exports to the west were affected which I would presume has an effect on their GDP. how are you expecting these figures to redeem themselves unless the wests economies improve to the point of importing again from Thailand, surely the whole execise on the fall of a countries currency/finance rating is dependant on their long term ability to keep public borrowing to a minimum and increase their exports not something I've read that any country is doing at the moment, I do not understand the logic that one or a few countries are going to be sole beneficiaries, it seems to me that everyones in the same boat, as for the number of tourists from the west falling and their numbers being replaced by people from other regions would this not depend a lot on these other regions not being in the same financial boat as the west, I always assumed that most developing nations had a need to export to the west to obtain the necessary foriegn currency, as I said I'm no expert, probably along the lines of most posters here.

[cocopops]

Of course as this all ties in to US$ vs THB, the rise in the pound is presumably tied to demise of GM and the rise in the markets.

Somehow can't help wondering whether Geithner volunteered to go to China or was summoned.

Apparently in a speech to Beijing Uni when he announced that China's investments in US bonds were safe, he was laughed at.

Be interestingly to see how things pan out in the next few weeks.

That story is all over the blogosphere this morning. I can't help but think it must have been staged.

[cmsally]

Oh boy would I love to be a fly on the wall in Beijing!

On the face of things US have been cut down a peg or two with the demise of GM and their debt situation.

But who really holds the power with all that Chinese money invested in US govt bonds.

I sense a bit of a balancing act going on.

[wackysleet]

Oh boy would I love to be a fly on the wall in Beijing!

On the face of things US have been cut down a peg or two with the demise of GM and their debt situation.

But who really holds the power with all that Chinese money invested in US govt bonds.

I sense a bit of a balancing act going on.

There's been a lot of talk lately about the Chinese pushing to make their currency a world wide substitute for the dollar and it's always possible seeing the growth rate they are experiencing especially within the Asian countries.

[nookiebear]

over 56 baht per £ today whooping heck!!!

Not for cash ........The best you'll get is dead on 55 at UOB,54.98 at Bank of Ayudhya

[ChiangMaiFun]

over 56 baht per £ today whooping heck!!!

Not for cash ........The best you'll get is dead on 55 at UOB,54.98 at Bank of Ayudhya

55. 70 at Ayudhya if you have a foreign currency account and transfer today as I will do in about 30 minutes! got to have reached a ceiling soon I would think

[yabaaaa]

over 56 baht per £ today whooping heck!!!

Not for cash ........The best you'll get is dead on 55 at UOB,54.98 at Bank of Ayudhya

you obviously dont know "superrich" 55.8 this morning

[yabaaaa]

AND NOW 56.2 IF ANYONE IS CHANGING TODAY

[yabaaaa]

over 56 baht per £ today whooping heck!!!

Not for cash ........The best you'll get is dead on 55 at UOB,54.98 at Bank of Ayudhya

55. 70 at Ayudhya if you have a foreign currency account and transfer today as I will do in about 30 minutes! got to have reached a ceiling soon I would think

Its interesting as this is a big increase for the £ in just over 2weeks I wonder where its going to settle? Now superrich are doing 56.5 im hanging on for 57 then changing my cash. Has the worlds problems finally started to "hit home" for Thailands currency?

[12DrinkMore]

. Has the worlds problems finally started to "hit home" for Thailands currency?

more like the US problems have started to "hit home" for the USD.

[cmsally]

With China buying the majority of shares so banks can raise capital to pay back TARP, its more like China trying to keep the US economy afloat. China is going to have to balance this with the state of the domestic economy. Maybe just these facts are enough to push the US$ down as the rest of the world is closely watching.

[mommysboy]

With China buying the majority of shares so banks can raise capital to pay back TARP, its more like China trying to keep the US economy afloat. China is going to have to balance this with the state of the domestic economy. Maybe just these facts are enough to push the US$ down as the rest of the world is closely watching.

$ - Reverse of deleveraging. It looks worse when you compare it to the pound because the pound was very undervalued. It looks worse agains the bt. because the bt. is very overvalued.

THEY ARE ALL IN THE CART! EUROPEANS BY WAY OF THE CREDIT CRUNCH, ASIANS BY WAY OF THE SLUMP IN DEMAND THAT IT HAS LED TO.

Numerous contributors seem to think it's a US problem, or a UK problem, or Bongoland will be hit but Thailand won't etc. That's inaccurate. In fact many Asian economies have worse to come due to a time lag effect.

[chiang mai]

If you look at the history of USD/THB it has gone from the peg level of 1.25 in 1997 its current 1.34, that's a gain of only 9 cents

9 cents ? :D

Running out of time and fingers getting ahead of the brain - as I recall the thought at the time was GBP/USD at peg level versus what it reached after its recent fall - will all have to wait until after hols now, relaxing is much more fun, but don't let that stop you guys from going for it!

Edited June 3, 2009 by chiang mai

[Merangue]

Wifey got 56.1 on nationwide cash card withdrawal yesterday. Gawd knows what it will be today as we seem to be getting good rates the last few days on the card.

[RAZZELL]

Wifey got 56.1 on nationwide cash card withdrawal yesterday. Gawd knows what it will be today as we seem to be getting good rates the last few days on the card.

Did I predict 66 by Christmas?

RAZZ

[yabaaaa]

sunk like a stone overnight down 1 baht

[Naam]

sunk like a stone overnight down 1 baht

look at USD/GBP.

[yabaaaa]

sunk like a stone overnight down 1 baht

look at USD/GBP.

It's ok Naam I looked with only 1 eye open to lessen the shock (Thai style)

How's ther dog coping with all this turmoil??

[Merangue]

Probably a reaction to the infighting going on in the Labour party, the resignations from the cabinet in the UK and the Email doing the circuit in the house of commons looking to remove Brown from power.

Browns leadership ability is extremely tentative at the moment.

[cmsally]

It shows up clearly enough in the GBP-US$ rates . But it seems we are clawing back up again past 1.64

Who knows what the reason was. Merkel realised its time to "stop the train and get off". UK politics is falling apart. Maybe it was anticipation on interest rates. So far maybe just a blip.

I'm sure after a few more thousand pages we will have it worked out!

[Naam]

sunk like a stone overnight down 1 baht

look at USD/GBP.

It's ok Naam I looked with only 1 eye open to lessen the shock (Thai style) How's the dog coping with all this turmoil??

he refused to poo today (because of heavy rains) but recommended that i buy more GBP denominated bonds (which i did).

natchurally i argued vizz him zat ze Pound has bekome verry shtrong vs. ze YEWro and zat it kost me mutch to tchange YEWros into Pounds. butt he vas unrelenting und konvinzed me by drawing my attentchion to ze fakt zat ze revards outveigh ze risk. iff he iss rong i vill dedukt ze losses from his dog food!

[Merangue]

It shows up clearly enough in the GBP-US$ rates . But it seems we are clawing back up again past 1.64

Who knows what the reason was. Merkel realised its time to "stop the train and get off". UK politics is falling apart. Maybe it was anticipation on interest rates. So far maybe just a blip.

I'm sure after a few more thousand pages we will have it worked out!

HAd not considered the interest rates. They are out again today aren't they?

Probably right as they have been kept at the same level after all.

[cmsally]

It shows up clearly enough in the GBP-US$ rates . But it seems we are clawing back up again past 1.64

Who knows what the reason was. Merkel realised its time to "stop the train and get off". UK politics is falling apart. Maybe it was anticipation on interest rates. So far maybe just a blip.

I'm sure after a few more thousand pages we will have it worked out!

HAd not considered the interest rates. They are out again today aren't they?

Probably right as they have been kept at the same level after all.

Not exactly much space to go down so but it still seemed to be a major factor. Anyway remains unchanged.

We're on the way up again.

Edited June 4, 2009 by cmsally

[JimsKnight]

C'mon £ vs baht. Up you go, up tiddly-up-up-up

[yabaaaa]

sunk like a stone overnight down 1 baht

look at USD/GBP.

It's ok Naam I looked with only 1 eye open to lessen the shock (Thai style) How's the dog coping with all this turmoil??

he refused to poo today (because of heavy rains) but recommended that i buy more GBP denominated bonds (which i did).

natchurally i argued vizz him zat ze Pound has bekome verry shtrong vs. ze YEWro and zat it kost me mutch to tchange YEWros into Pounds. butt he vas unrelenting und konvinzed me by drawing my attentchion to ze fakt zat ze revards outveigh ze risk. iff he iss rong i vill dedukt ze losses from his dog food!

Im pleased to hear zat ,and hope zat ve kin boat enjoy ze episode of Fawlty Towers in vich Herr Fawlty explains to ze Kraut who started ze var etc , always good for a laugh.

Re Fido, am hoping the plunging pound helped him Sh*t himself like it does many here

[ilovefashionTV]

C'mon £ vs baht. Up you go, up tiddly-up-up-up

Not if ive got anything to do with it.

Edited June 5, 2009 by ilovefashionTV