UK Pound Collapse 47.99 against the Baht

[kraxlhuber]

YIPPEE

Good news for me - I'm going to the UK this month.

Also, when I send money home to my mother, she gets more.

It isn't too bad for the pensioners - it was only 37 baht to the pound when I first came here in 1992.

It might make a few of the undesirable stay away from here, or go back too.

Silly,or what, the bar broads simply join the reds,making a buck on the sly as well.TIT.

If you dont have money,take to one from the neighbors.

Thailand,a Volk of Ali Babas.

Saddam turns red in his grave?,some say he is alive in Monterosso.

[Gambles]

While LOS tears itself apart ( in Bangkok and the deep south ) and looks set for greater instability, Britain seems to be edging towards recovery, but the baht remains below 50 to the pound! Just how bad does it have to get before the baht falls?

Not that I'm hoping for more deaths etc, just for a more livable exchange rate.

longer term, I fear that you'll be disappointed about the FX rate unless things here escalate unrecognisably from where we're at right now - in which case you might not even want to be here.....Baht is struturally a better place to be than GBP right now but political events in both countries could well be overshadowing that.....

[Chaimai]

My guess is it will go to US 1.55 and 50baht[/b]. - possibly but only briefly, keep your eye on 1.57, if it breaks that level then it may be sustained.

Good effort chiang mai - is this a revision to your post #14 ? :-

Pound at USD 1.20 by mid year, GBP/THB around 40.

Difficult to maintain credibility with crystal ball swings as big as that.

[Gambles]

My guess is it will go to US 1.55 and 50baht[/b]. - possibly but only briefly, keep your eye on 1.57, if it breaks that level then it may be sustained.

Good effort chiang mai - is this a revision to your post #14 ? :-

Pound at USD 1.20 by mid year, GBP/THB around 40.

Difficult to maintain credibility with crystal ball swings as big as that.

Vol could get really scary and fly off the charts again

I'm not endorsing those numbers in particular but there not the level where you could rule anything out - although I think that H2 will be the crazy time if this isn't already the cusp of it

[KKvampire]

I know where i would rather have my money invested if its a choice between Uk and thailand at the moment and it ain't this South East Asian country

[sarahsbloke]

The currency swings are so small as to be meaningless.

this past two years 55 at best 48 at worst, 50 today ...... trivial.

And for those doom and gloom merchents, the rise is only a blip, it will soon be down to 20 bht to the pound ........ NOT!

[tso310]

Chinese flock to John Lewis

John Lewis says the number of Chinese shoppers in its Oxford Street store in London increased by 73 per cent in

2009 compared with the year before. The Daily Telegraph comments that the weak pound is partly behind the influx of Chinese shoppers, but rising disposable incomes and the burgeoning middle class in China are equally important.

John Lewis's experience has been repeated all over the West End. In the year to November 30, the New West End Company - which oversees trade on Oxford Street, Regent Street and Bond Street - reported a 118 per cent rise in Chinese shoppers.

The Daily Telegraph Business, Date: 08/04/2010, Page: 3

One man's poison is another man's meat, so to speak.

The question remains: how many Chinese shoppers in 2008 ?

LaoPo

Here ya go.

The number of Chinese tourists has grown rapidly since Britain was deemed an “authorised destination” by their government five years ago.

At the same time, the amount each visitor is spending has soared because of the weak pound, according to tax-free shopping service Global Blue. The average Chinese tourist now spends £631 on retail goods in Britain compared with £344 at the start of 2008.

The number visiting each year has jumped from 150,000 to nearly 200,000. Most travel on organised tours which include shopping expeditions in their sightseeing schedules.

Before 2005, only Chinese business people and students could obtain visas to the UK.

[apetley]

The currency swings are so small as to be meaningless.

this past two years 55 at best 48 at worst, 50 today ...... trivial.

And for those doom and gloom merchents, the rise is only a blip, it will soon be down to 20 bht to the pound ........ NOT!

May 2008 rate was 62. something as I transferred a heap to finish my house I was building at the time.

Shortly before that I got 71 bht to the pound.

[Livinginexile]

Good news for me!

My salary here in Bangkok is getting stronger.

It all depends on where you stand really.

[Abrak]

Here ya go.

The number of Chinese tourists has grown rapidly since Britain was deemed an “authorised destination” by their government five years ago.

At the same time, the amount each visitor is spending has soared because of the weak pound, according to tax-free shopping service Global Blue. The average Chinese tourist now spends £631 on retail goods in Britain compared with £344 at the start of 2008.

The number visiting each year has jumped from 150,000 to nearly 200,000. Most travel on organised tours which include shopping expeditions in their sightseeing schedules.

Before 2005, only Chinese business people and students could obtain visas to the UK.

Whoopee.... In 2008 Thailand had over 1 million tourists from China. That is 5x the tourists for an economy a tenth of the size.

[chiang mai]

My guess is it will go to US 1.55 and 50baht[/b]. - possibly but only briefly, keep your eye on 1.57, if it breaks that level then it may be sustained.

Good effort chiang mai - is this a revision to your post #14 ? :-

Pound at USD 1.20 by mid year, GBP/THB around 40.

Difficult to maintain credibility with crystal ball swings as big as that.

Just saw this post, I've been, ahem, on "vacation"!

No I'm not changing my views on GBP/USD although I am commenting on events that may cause an eventual shift, unsure, just like everyone else on the planet. The current scenario seems to suggest that markets are now warming to the idea of a hung Parliament and indeed, the more I hear on the subject the more it makes good sense for UK Plc. All of that somewhat offsets the notion that a hung Parliament might ignite a run on the Pound and a subsequent Sterling crisis, but until someone puts the numbers on the table, I remain invested/protected on the basis that Sterling will fall.

As for the credibility issue you mention, I am a pure novice in this field but I have opinions and views and sometimes I test those things against a very small handful of experts on this forum who occasionally correct my thinking, unfortunately my views are often tested by others who have much less of a clue than I do. My call to sell GBP against USD eighteen months ago was the right one but that was a no brainer, unfortunately 99.7% of readers didn't think so, let's see where we go from here shall we.

[sumrit]

The currency swings are so small as to be meaningless.

this past two years 55 at best 48 at worst, 50 today ...... trivial.

And for those doom and gloom merchents, the rise is only a blip, it will soon be down to 20 bht to the pound ........ NOT!

When I transfered £10,000 to Thailand in March 2007 to buy a car I got 718,000 baht. (71.8 baht/)

Just over a year later (April 2008) I transfered £11,000 towards buying a house but got just 704,000 baht. (64 baht/£)

To get the same 718,000 baht today (@49 baht/£) I would need £14,653!!!!!!!!!!!!

I don't think having to find an extra 46.6% more money just to maintain the same living standards of just three years ago is a meaningless swing, and it's not trivial either. For anybody being paid in GBP it's a 32% salary cut.

Oh, and 71.8 baht/£ wasn't a blip either, the exchange rate had been fairly stable at around 68-72 baht/£ for a for a few years around that time.

[sarahsbloke]

Oh, and 71.8 baht/£ wasn't a blip either, the exchange rate had been fairly stable at around 68-72 baht/£ for a for a few years around that time.

I believe in the early 1990s and earlier it was about 30bht/UKP

[vicco]

There are some currencies that are appreciating against the Baht. Just a year or so ago the Canadian $ was only buying around 27-28 Baht....now is 32+

Australian $ has seen the same pattern. A small part of my income is from the UK state pension. I looked back over my paperwork and just over 2 years ago my staggering 57 pounds a week was buying Can $122.55....last month it was buying Can $87.. Anyone who is totally relying on GBP for income must be suffering a serious downturn in living standards. As someone has already said it's not the Baht that is especially strong....it's those other currencies that are very weak right now.

[Abrak]

The currency swings are so small as to be meaningless.

this past two years 55 at best 48 at worst, 50 today ...... trivial.

And for those doom and gloom merchents, the rise is only a blip, it will soon be down to 20 bht to the pound ........ NOT!

When I transfered £10,000 to Thailand in March 2007 to buy a car I got 718,000 baht. (71.8 baht/)

Just over a year later (April 2008) I transfered £11,000 towards buying a house but got just 704,000 baht. (64 baht/£)

To get the same 718,000 baht today (@49 baht/£) I would need £14,653!!!!!!!!!!!!

I don't think having to find an extra 46.6% more money just to maintain the same living standards of just three years ago is a meaningless swing, and it's not trivial either. For anybody being paid in GBP it's a 32% salary cut.

Oh, and 71.8 baht/£ wasn't a blip either, the exchange rate had been fairly stable at around 68-72 baht/£ for a for a few years around that time.

Well you mention 2 time points in your post. First March 2007 and second April 2008.

There is no doubt that the baht appreciated in 2007. However if you look at the US dollar exchange rate in April 2008 you will see that the baht has slightly depreciated. Now the US$ is not the only currency out there but it is the main dollar peg to the baht. You can also look at the baht's trade weighted value.

I think if you look at the numbers you will basically come to the conclusion that the baht rose in 2007 and from April 2008 the underlying problem was sterling's fall. In reality, on a trade weighted basis while the baht has generally appreciated it has not been subject to violent swings. It is sterling that has been showing strong volatility rather than the baht. Sterling has had a very marked devaluation over the last two years rather than the baht has appreciated.

[AGareth2]

"Sterling has had a very marked devaluation over the last two years rather than the baht has appreciated."

sadly

[chiang mai]

There are some currencies that are appreciating against the Baht. Just a year or so ago the Canadian $ was only buying around 27-28 Baht....now is 32+

Australian $ has seen the same pattern. A small part of my income is from the UK state pension. I looked back over my paperwork and just over 2 years ago my staggering 57 pounds a week was buying Can $122.55....last month it was buying Can $87.. Anyone who is totally relying on GBP for income must be suffering a serious downturn in living standards. As someone has already said it's not the Baht that is especially strong....it's those other currencies that are very weak right now.

Have a look:

http://www.oanda.com/

[Gambles]

There are some currencies that are appreciating against the Baht. Just a year or so ago the Canadian $ was only buying around 27-28 Baht....now is 32+

Australian $ has seen the same pattern. A small part of my income is from the UK state pension. I looked back over my paperwork and just over 2 years ago my staggering 57 pounds a week was buying Can $122.55....last month it was buying Can $87.. Anyone who is totally relying on GBP for income must be suffering a serious downturn in living standards. As someone has already said it's not the Baht that is especially strong....it's those other currencies that are very weak right now.

Have a look:

http://www.oanda.com/

if risk assets weaken during te nrest of the year then US$ should be the place to be and non-indebted, nonUSD-linked Asian currencies should weaken versus USD but strengthen versus most others

If USD weakens thereafter then there's a good chance that non-indebted, nonUSD-linked Asian currencies could be the place to be

Dollar, Euro, AUD and Yen all face huge risks over the rest of '10 and these could be the key to risk-asset weakness/USD strength

However it's not cut and dry - there are risks to Dollar too - in which case nonUSD-linked Asian currencies could be a good call right now. With all the political shenanigans here right now, maybe SGD starts to look a great compromise....

[mommysboy]

My guess is it will go to US 1.55 and 50baht[/b]. - possibly but only briefly, keep your eye on 1.57, if it breaks that level then it may be sustained.

Good effort chiang mai - is this a revision to your post #14 ? :-

Pound at USD 1.20 by mid year, GBP/THB around 40.

Difficult to maintain credibility with crystal ball swings as big as that.

Vol could get really scary and fly off the charts again

I'm not endorsing those numbers in particular but there not the level where you could rule anything out - although I think that H2 will be the crazy time if this isn't already the cusp of it

In all honesty, CM was only responding to my speculation, his own predictions are very clear.

My short term prediction is more or less right.

It's the Thai end that is so tricky to predict.

IMHO the pound is going to remain at this level against a basket of currencies for many months or years to come.

But I simply don't understand why there is so much inward flow of investment in Thailand. Who is investing and in to what? And who the heck would sink billions in to such an unstable country anyway? If it is short term speculation, as I think, the flow might be reversed quite easily and then there could be something of a crash.

[Mobi]

As of 8 pm tonight Kasikorn Bank is quoting TT buying rate of 49.525 and a TT selling rate of 50.108.

The GBP/USD rate is 1.54.

Seems like total panic is a little premature.

I haven't bothered to read 20 pages of expertise and speculation, but IMHO the rates will probably stay at around this level, give or take, and the pound will probably strengthen a little after the election, whoever wins.

I also think the baht will slowly weaken over the coming months as the economic effects of the political crisis (tourism, retail sector etc) work their way through into the published figures.

But don't hang me if I'm wrong!

[chiang mai]

As of 8 pm tonight Kasikorn Bank is quoting TT buying rate of 49.525 and a TT selling rate of 50.108.

The GBP/USD rate is 1.54.

Seems like total panic is a little premature.

I haven't bothered to read 20 pages of expertise and speculation, but IMHO the rates will probably stay at around this level, give or take, and the pound will probably strengthen a little after the election, whoever wins.

I also think the baht will slowly weaken over the coming months as the economic effects of the political crisis (tourism, retail sector etc) work their way through into the published figures.

But don't hang me if I'm wrong!

I think we're at one of those moments in time when the pendulum could swing either way and swing quite dramatically too. The idea of a hung Parliament has gained some appeal and in some circles is actually being seen as the best outcome, I can't argue with that. The biggest risk is that Labour wins outright, that will be bad for Sterling and for the country but all other options look palatable, from a Forex perspective. As for the Baht weakening: I can't see any reason why it would, the political unrest is little more than short term noise from a currency exchange perspective so I'm going to stick with my earlier projections, although I must confess to becoming mildly concerned at the potential for a strengthening Pound, a quick recheck of UK debt loads soothes that nervousness however.

[Naam]

But I simply don't understand why there is so much inward flow of investment in Thailand. Who is investing and in to what? And who the heck would sink billions in to such an unstable country anyway? If it is short term speculation, as I think, the flow might be reversed quite easily and then there could be something of a crash.

soon it will be FOUR years since this theory is published in Thaivisa.

[Mobi]

But I simply don't understand why there is so much inward flow of investment in Thailand. Who is investing and in to what? And who the heck would sink billions in to such an unstable country anyway? If it is short term speculation, as I think, the flow might be reversed quite easily and then there could be something of a crash.

soon it will be FOUR years since this theory is published in Thaivisa.

Nobody seems to understand the incredibly high flow of investment into Thailand.

I have not read a single analyst who can satisfactorily explain it, except to say that when half the world is on the point of financial meltdown then Thailand, with it's burgeoning exports, is the is the best of a bad bunch if you have investors' money that's burning a hole in your pocket.

Who can say if it will continue this way? If i knew I would be as rich as Soros.

Chiang Mai ..the political unrest is little more than short term noise from a currency exchange perspective

Maybe, but I doubt it. By general consensus this 'political unrest' is the worst for decades and is unlikely to end some time soon. It could well escalate into even more violence and possibly civil war.

The next few days may be critical.

I can't see exports, or the Baht standing up to a civil war.....

But who knows for sure?

After all TIT.

[Naam]

But I simply don't understand why there is so much inward flow of investment in Thailand. Who is investing and in to what? And who the heck would sink billions in to such an unstable country anyway? If it is short term speculation, as I think, the flow might be reversed quite easily and then there could be something of a crash.

soon it will be FOUR years since this theory is published in Thaivisa.

Nobody seems to understand the incredibly high flow of investment into Thailand.

that there is an incredibly high inflow of investment into Thailand is a myth Mobi. i don't deny that there is considerable inflow but the strength of the Baht is mainly based on the actions of the BoT.

[Mobi]

But I simply don't understand why there is so much inward flow of investment in Thailand. Who is investing and in to what? And who the heck would sink billions in to such an unstable country anyway? If it is short term speculation, as I think, the flow might be reversed quite easily and then there could be something of a crash.

soon it will be FOUR years since this theory is published in Thaivisa.

Nobody seems to understand the incredibly high flow of investment into Thailand.

that there is an incredibly high inflow of investment into Thailand is a myth Mobi. i don't deny that there is considerable inflow but the strength of the Baht is mainly based on the actions of the BoT.

Maybe it's a combination of the two.

Certainly I have read reports in the Business Post often enough reporting on the latest inflow of foreign investment, and the is no argument that Thailand's reserves are incredibly high.

I've always tended to think that serious manipulation by the BOT is a bit of a myth - after all, the last minister to get involved in trying to stabilize the Baht is serving 30 years in jail, so I would have thought that any Thai official would think twice before getting too involved in currency actions.

I must admit that I am very puzzled why just the mere suggestion of a hung parliament in the UK would bring about a crash on sterling, led by speculators, yet the mere suggestion of a civil war in Thailand seems to have no effect whatsoever.

World currency markets and stocks are notoriously influenced by speculators who pull their money out, or put it in with the flimsiest of reasons, many of which prove to be completely groundless.

Why does Thailand appear to be immune. Maybe their turn will come... one day.

But I naturally bow to ex-bankers expertise on such matters - I am a mere amateur.

[thaibeachlovers]

Oh, and 71.8 baht/£ wasn't a blip either, the exchange rate had been fairly stable at around 68-72 baht/£ for a for a few years around that time.

I believe in the early 1990s and earlier it was about 30bht/UKP

and in 1996 it was 45 to the pound, but given that most things that I buy/ use have doubled in price I'm WORSE off at the present exchange rate. I'd need an exchange rate of over 80 to the pound to be as affluent as I was back then.

[sarahsbloke]

I must admit that I am very puzzled why just the mere suggestion of a hung parliament in the UK would bring about a crash on sterling, led by speculators, yet the mere suggestion of a civil war in Thailand seems to have no effect whatsoever.

Maybe the Bht is stable because it's not a currency the speculators play with. No putting in or pulling out so no violent swings.

[chiang mai]

I must admit that I am very puzzled why just the mere suggestion of a hung parliament in the UK would bring about a crash on sterling, led by speculators, yet the mere suggestion of a civil war in Thailand seems to have no effect whatsoever.

Maybe the Bht is stable because it's not a currency the speculators play with. No putting in or pulling out so no violent swings.

I think that's a large part of the answer but another part involves the role of the Central Banks. The BOE does not actively engage in currency manipulation but prefers to let the value of the Pound be determined by market forces, the BOT on the other hand is actively engaged in maintaining the Baht at a level it feels is suitable. All that having been said, the Baht is a bit player in the global Forex market whereas Sterling is a global currency.

[roamer]

As of 8 pm tonight Kasikorn Bank is quoting TT buying rate of 49.525 and a TT selling rate of 50.108.

The GBP/USD rate is 1.54.

Seems like total panic is a little premature.

I haven't bothered to read 20 pages of expertise and speculation, but IMHO the rates will probably stay at around this level, give or take, and the pound will probably strengthen a little after the election, whoever wins.

I also think the baht will slowly weaken over the coming months as the economic effects of the political crisis (tourism, retail sector etc) work their way through into the published figures.

But don't hang me if I'm wrong!

I think we're at one of those moments in time when the pendulum could swing either way and swing quite dramatically too. The idea of a hung Parliament has gained some appeal and in some circles is actually being seen as the best outcome, I can't argue with that. The biggest risk is that Labour wins outright, that will be bad for Sterling and for the country but all other options look palatable, from a Forex perspective. As for the Baht weakening: I can't see any reason why it would, the political unrest is little more than short term noise from a currency exchange perspective so I'm going to stick with my earlier projections, although I must confess to becoming mildly concerned at the potential for a strengthening Pound, a quick recheck of UK debt loads soothes that nervousness however.

Strange. Every commentator I've read has raised the nightmare scenario being a hung parliament with Tories being the largest party trying to form a coalition with the Liberal Democrats. Somehow think that the Lib Dem's desire to join the Euro, abolish Trident and grant an amnesty for immigrants might prove sticking points.

[chiang mai]

As of 8 pm tonight Kasikorn Bank is quoting TT buying rate of 49.525 and a TT selling rate of 50.108.

The GBP/USD rate is 1.54.

Seems like total panic is a little premature.

I haven't bothered to read 20 pages of expertise and speculation, but IMHO the rates will probably stay at around this level, give or take, and the pound will probably strengthen a little after the election, whoever wins.

I also think the baht will slowly weaken over the coming months as the economic effects of the political crisis (tourism, retail sector etc) work their way through into the published figures.

But don't hang me if I'm wrong!

I think we're at one of those moments in time when the pendulum could swing either way and swing quite dramatically too. The idea of a hung Parliament has gained some appeal and in some circles is actually being seen as the best outcome, I can't argue with that. The biggest risk is that Labour wins outright, that will be bad for Sterling and for the country but all other options look palatable, from a Forex perspective. As for the Baht weakening: I can't see any reason why it would, the political unrest is little more than short term noise from a currency exchange perspective so I'm going to stick with my earlier projections, although I must confess to becoming mildly concerned at the potential for a strengthening Pound, a quick recheck of UK debt loads soothes that nervousness however.

Strange. Every commentator I've read has raised the nightmare scenario being a hung parliament with Tories being the largest party trying to form a coalition with the Liberal Democrats. Somehow think that the Lib Dem's desire to join the Euro, abolish Trident and grant an amnesty for immigrants might prove sticking points.

Let's not confuse the difference between the things that are good for the Pound versus the thing that might be good for the UK, we're at serious risk of going way off topic is we continue this debate along these lines but clearly I don't believe for a moment that the two things are the same at all.