Thai Baht Nears 22-month High

[Gambles]

On a side issue,I invoice in Euro and it gets paid into SCB at the prevailing rate.

Is it possible to open an Euro account with a Thai or online bank so I can leave the funds for a better rate,and only withdraw when necessary.

I hope that you're patient - the 3 choices for a sustained stronger Euro against Baht:

1) You might get lucky

2) Not in my lifetime

3) Not until hel_l freezes over

2 and 3 look the likelier possibilities to me.

(Not intended as guidance or advice. No liability accepted)

[MaiChai]

Move to the Phillipines/Indonesia/Cambodia/Vietnam? Alot of foreigners are living here because it WAS cheap compared to their home countries. However the reality is its becoming increasing expensive to live here, and thats before you factor in exchange rates. In some respects I think Thailand is becoming a little too developed for the retire/live in paradise ideal. Personally I think you need to be flexible enough to move to another country if the economics no longer work for you but the trouble is alot of folks put down roots, etc. I suspect it will get worse and you can only tighten you belt so much before you need to go home or move to a cheaper country.

An option is to work here. Increased prices also mean you can earn more here? Just a thought. Do a degree/masters at home so you can teach your profession?

[mommysboy]

In any other country with these problems, demonstrators getting free reign, tourists cancelling, major stores closed, economy wrecked, the currency would be dropping like a stone. The reason for its strength is quite clear to anyone.

lol, Economy wrecked? Not sure you are paying attention to economic fundamentals.

http://beta.mcot.net/cfcustom/cache_page/47561.cfm

Thai exports surge 41% in March; record high in 17 months.

..a trade surplus of about $1.54 billion in March and $2.11 billion in the first three months of 2010.

4 roads in Bangkok closed. The remaining 99.99% remain open and normal. Who needs Central World anyway, everyone is just shopping in Emporium instead.

Agreed, the most frequently asked question on TV of late, "why is the Baht so strong". Folks who say they don't understand why the Baht is so strong simply aren't looking at the facts or indeed even trying to understand why it is so, mostly what I think they are really saying is, God, I wish it were a lot weaker. But honestly, I do believe that those people are the ones who look at Thailand with a very surface view, sun, sea, booze and available women and that's all there must be here because it's all so dirty and inefficient and corrupt, nonsense.

Regarding trying to understand, well it is rather difficult to get to grips with, I mean only this week we've had reports from official sources, one saying GDP growth will be 4% or higher, whilst today I believe the figure is 2%. I mean what chance of understanding? Also how reliable are Thai figures, bearing in mind tourism is taken to represent 6% of GDP- they're having a laugh aren't they!

Either way is 4% good then ?, I'd have thought it quite poor all things considered. I'm also beginning to wonder what the relationship between GDP and profit is. GDP I reckon equates to turnover only in my mind. So all this extra growth might amount to nothing much, whereas all those fat profit margins in tourism , much of it staying in the local economy may be sorely missed- I don't know just speculating, but that's the argument, nobody on this board seems to know.

Quite right about Thailand's admirable foreign reserves and balances, but how many times is good news going to be factored in to the currency price, meanwhile it's had yet another downgrade. So what of fundamentals now!.

CM- It is a corrupt society, this is not a matter of idle speculation. Last report I read it was 11 out of 13 in an already rather corrupt segment of the world, and for that reason things are rather inefficient. That rather nice story abot the explosive detector that didn't work was a rather nice example of what goes on day in and day out and in fact is seen as the norm for doing business here.

But supposing all is correct, ok, how much longer do you think the poor will put up with being under paid slaves to Ford or Toyota or whoever, they're out on the steets now for heaven sake! And Thailand is rapidly becoming less and less price competitive, no way will the arrow just shoot upwards.

[Gambles]

In any other country with these problems, demonstrators getting free reign, tourists cancelling, major stores closed, economy wrecked, the currency would be dropping like a stone. The reason for its strength is quite clear to anyone.

lol, Economy wrecked? Not sure you are paying attention to economic fundamentals.

http://beta.mcot.net/cfcustom/cache_page/47561.cfm

Thai exports surge 41% in March; record high in 17 months.

..a trade surplus of about $1.54 billion in March and $2.11 billion in the first three months of 2010.

4 roads in Bangkok closed. The remaining 99.99% remain open and normal. Who needs Central World anyway, everyone is just shopping in Emporium instead.

Agreed, the most frequently asked question on TV of late, "why is the Baht so strong". Folks who say they don't understand why the Baht is so strong simply aren't looking at the facts or indeed even trying to understand why it is so, mostly what I think they are really saying is, God, I wish it were a lot weaker. But honestly, I do believe that those people are the ones who look at Thailand with a very surface view, sun, sea, booze and available women and that's all there must be here because it's all so dirty and inefficient and corrupt, nonsense.

Regarding trying to understand, well it is rather difficult to get to grips with, I mean only this week we've had reports from official sources, one saying GDP growth will be 4% or higher, whilst today I believe the figure is 2%. I mean what chance of understanding? Also how reliable are Thai figures, bearing in mind tourism is taken to represent 6% of GDP- they're having a laugh aren't they!

Either way is 4% good then ?, I'd have thought it quite poor all things considered. I'm also beginning to wonder what the relationship between GDP and profit is. GDP I reckon equates to turnover only in my mind. So all this extra growth might amount to nothing much, whereas all those fat profit margins in tourism , much of it staying in the local economy may be sorely missed- I don't know just speculating, but that's the argument, nobody on this board seems to know.

Quite right about Thailand's admirable foreign reserves and balances, but how many times is good news going to be factored in to the currency price, meanwhile it's had yet another downgrade. So what of fundamentals now!.

CM- It is a corrupt society, this is not a matter of idle speculation. Last report I read it was 11 out of 13 in an already rather corrupt segment of the world, and for that reason things are rather inefficient. That rather nice story abot the explosive detector that didn't work was a rather nice example of what goes on day in and day out and in fact is seen as the norm for doing business here.

But supposing all is correct, ok, how much longer do you think the poor will put up with being under paid slaves to Ford or Toyota or whoever, they're out on the steets now for heaven sake! And Thailand is rapidly becoming less and less price competitive, no way will the arrow just shoot upwards.

Apologies for being lazy and posting this on several threads but it seems very relevant -

As we're not allowed to copy BangkokPost original article on TV forum, I'll copy our press release instead if that's OK...

One of the world’s leading global portfolio managers told The Bangkok Post that Thailand might fail to capitalise on its strengths to become one of the best investment markets in Asia if political risk continues to affect the country's economy.

Scott Campbell, an S&P award-winning fund manager, told Post writer Pornnalat Prachyakorn that foreign investors remain bullish on the growth of emerging markets including Asia -

''Asia along with other emerging markets will continue to be the best place for investment for the next 30 to 40 years. Over the past 10 years, the stock market in the west has done nothing while Asian stock markets have grown three-to-fourfold.'','' said Mr. Campbell, Managing Director of award-winning MitonOptimal Guernsey.

Khun Pornnalat reported that although Thailand's economic fundamentals are attractive, political risk is seen as the major obstacle on the path to a better economic position, which is highlighted by the relative performance of the Baht during the period since April last year, which has seen a significant rebound in Asian currencies.

''Currency is a barometer of political risk and the Thai Baht has been pretty much flat since last year [on a trade-weighted basis]'' he said. ''If the political risk gets sorted out, then you may see the Thai baht appreciate just to catch up with what other regional currencies which it has lagged during this time.'' adding that the fundamentals for the whole Asian region are still very positive but Thailand could lag because of political instability.

Paul Gambles, Managing Partner of leading research and advisory consultancy MBMG Group, said that observers such as Dr. Mark Mobius have noted that Thailand started to underperform the rest of the region in 2004, when political tensions first began to affect the economy -

''Thailand's economy has significantly underperformed over the last few years. This can be best be seen by comparing Thailand's economic growth, foreign-exchange rates and stock market valuations with those of comparable economies in Southeast Asia,'' he said, quoting research by John Sheehan of the consultancy Global Market Asia, that growth rates in a number of Asean neighbours had not only caught up, but had overtaken that of Thailand:

''If you take the superior GDP growth rate of a jurisdiction like the Philippines and apply this higher rate to Thailand's growth from 2005, it can be seen that by the end of 2008 Thailand's GDP would be somewhere between US$30 billion and $40 billion higher,''

One very positive sign for Asia, Mr. Campbell said, has been the growth in domestic consumption and markets and in intra-regional trade:

''The region is exporting within itself. This has shown that Asia is much less dependent on the west which is very positive,''

Asian demographics also are positive with the population distribution being similar to that of the United States Baby Boom era:

''An economy that has a bigger chunk of people at the bottom [age group] is in a much better shape than the economy that has bigger chunk of people at the top. India, for example, will progress through the baby boom stage and isn’t projected to reach the top heavy state that is starting to impact on the growth of the US today until 2050. In long term trends this is a theme very supportive of emerging markets growth for another 40 years or so.''

Scott also noted that other economic aspects are shifting from the West to the East –

“In the past, a high-risk portfolio was emerging market bonds, Japanese equities and developing market property. At the same time a low-risk one contained US government bonds, German blue-chip companies and UK property but now, the situation is completely reversed.''

Asian commercial property is particularly attractive in many cases with low gearing ratios and good yield carry. And while Asian growth may lead to higher interest rates, the strong carry differential will be partially protected by economic growth leading to higher rents and occupancy rates.

Scott Campbell remains bullish on gold as one of the allocated asset classes and based on a number of technical and fundamental factors expects gold prices to ultimately rise to between $2,000 and $2,500 an ounce. Gold has been one of the asset classes that has helped Scott to achieve exceptional outperformance over the last 10 years; a period in which the Dow Jones Industrial average has fallen by around 30% and the gold price has increased almost fivefold from its lowest point to current levels just below $1,200 an ounce.

[Gambles]

Move to the Phillipines/Indonesia/Cambodia/Vietnam? Alot of foreigners are living here because it WAS cheap compared to their home countries. However the reality is its becoming increasing expensive to live here, and thats before you factor in exchange rates. In some respects I think Thailand is becoming a little too developed for the retire/live in paradise ideal. Personally I think you need to be flexible enough to move to another country if the economics no longer work for you but the trouble is alot of folks put down roots, etc. I suspect it will get worse and you can only tighten you belt so much before you need to go home or move to a cheaper country.

An option is to work here. Increased prices also mean you can earn more here? Just a thought. Do a degree/masters at home so you can teach your profession?

VND is the only currency in a weakening phase against Baht....

Edited May 1, 2010 by Gambles

[sirineou]

China's property market will crash within 18 months.

The baht's tied to the yuan.

If you're holding baht, you will get CREAMED.

Short the euro, pound, and go long on the greenback.

And remember me as the bitch who told you so.

Interesting

why do you think the Chinese property market will collapse in 18 months

[Naam]

China's property market will crash within 18 months.

The baht's tied to the yuan.

If you're holding baht, you will get CREAMED.

Short the euro, pound, and go long on the greenback.

And remember me as the bitch who told you so.

Interesting

why do you think the Chinese property market will collapse in 18 months

the LORD does send prophets once i a while

[consnabit]

There ares some reasonable opinions here but most are off the mark. My take is this . As messed up as Thailand is, the baht is not the issue at all. Dollar, Euro and /sterling are in near freefall with minor corrections along the way. The tiny baht is of no consequence at all, they just are reaping the benefits. As to the Thai central bank intervention, not a chance , just too small to sell into the market to control the rate,. Not near enough reserves. Only the Chinese can do that. Follow the experts, Rodgers, Etc. to see where this is going. Keep your money in your home country and move a s required.

[mommysboy]

China's property market will crash within 18 months.

The baht's tied to the yuan.

If you're holding baht, you will get CREAMED.

Short the euro, pound, and go long on the greenback.

And remember me as the bitch who told you so.

Interesting

why do you think the Chinese property market will collapse in 18 months

the LORD does send prophets once i a while

He may be a prophet but will he make a profit?

[Oberkommando]

Sterling is being kept low to ease trade and improve British exports. 6 months and it will start to rise again. Good long term investment.

[Gambles]

Very interesting Nation piece from the excellent, Khun Achara, featuring a chap that I know and whose research I use and with whom I was recently on a panel discussion ref pegging the baht or not (I'll also post this on the other current Baht threads)

Thailand urged to resume pegged currency

By ACHARA DEBOONME

THE NATION

Published on May 4, 2010

Thailand and other Southeast Asian nations are being strongly urged to change their foreign-exchange policy, given that major Western currencies could further lose their shine, due to massive public debt.

Independent consultant John Sheehan yesterday advised Thai authorities to consider resuming the currency peg."If the baht moves freely, it could further appreciate to 25 to the US dollar. That would destroy exports and tourism," he said.

His argument lies heavily on the massive amount of public debt. Leading the charge is Japan, where public debt now exceeds 200 per cent of gross domestic product (GDP), with Europe and the US hot on their heels. They all need to cut back on spending, but this will result in lower tax receipts and an even bigger deficit. The options are to default on the debts or print more money, which would only lead to hyperinflation.

US public debt rose to US$11 trillion (Bt356 trillion) last year, or nearly the size of that country's economy, against $5 trillion in 2000. Sheehan expects the US to seek partial debt default sometime between 2012 and 2014.

He said the default outlook was imminent, given that inclusive of contingency liabilities, that country's public debt was now 160 per cent of GDP. Western countries are also shouldering a huge burden from unfunded welfare benefits.

The general belief is that a public-debt level of 60 per cent of GDP slows down economic growth. At 90 per cent, it could stop growth.

"If this hits 200 per cent, there are two options: hyperdeflation or default," Sheehan said.

Thus, Southeast Asian economies are urged to change their approach to foreign-exchange risk, because Western currencies are at the beginning of a long-term slide, and for smaller, export-based economies to continue flowing previous foreign-exchange approaches is illogical and will become increasingly risky. This is aside from major investment in new technologies and products and aggressive and active development of new export markets.

Southeast Asian currencies are now strengthening artificially, not in response to domestic growth, but rather to Western weakness. Sheehan said if this intensified, the baht could rise above 30 to the dollar, reaching even 25 - when it was last pegged to the US.

He said the simplest and most logical way of counteracting this was implementation of a managed peg similar to the Chinese model. This would stimulate growth immediately by increasing GDP and automatically build up reserves. The downside is inflation risk, but this is the lesser of two evils, particularly in a global recession.

In this way, Sheehan sees the advantage of the political crisis, which has weakened the baht, and he suggests authorities peg it once it hits bottom.

Last Friday, the baht fell to about 32 to the dollar, making it one of the region's weaker currencies. It is expected to trade at 32-32.40 this month on the uncertainty surrounding the ongoing political turmoil.

Sheehan sees less need for building up foreign reserves to defend the currency, because reserves are needed only to defend an overvalued currency. Given the perilous state of Western markets, the baht is now effectively undervalued. Hot-money flows have also been flagged, but given the likelihood of Western deflation, such flows into Thailand would be an issue regardless of whether the currency was pegged.

The baht can be fixed against a basket of currencies related to, say, export-destination markets, foreign direct investment or even commodity and energy prices, given that Thailand is reliant on exports and energy.

Sheehan ended by saying the sooner a peg was placed, the sooner the benefits would flow. This would also mitigate rebound volatility when the major Western currencies reverse their present long-term decline.

Edited May 3, 2010 by Gambles

[Deeral]

and how would you implement that in a "free trade economy"??

[roamer]

For a country where the export markets and tourism are of prime importance this would be an eminently sensible policy to adopt. We can therefore state with some certainty it will not be adopted.

[Naam]

There ares some reasonable opinions here but most are off the mark. My take is this . As messed up as Thailand is, the baht is not the issue at all. Dollar, Euro and /sterling are in near freefall with minor corrections along the way. The tiny baht is of no consequence at all, they just are reaping the benefits. As to the Thai central bank intervention, not a chance , just too small to sell into the market to control the rate,. Not near enough reserves. Only the Chinese can do that. Follow the experts, Rodgers, Etc. to see where this is going. Keep your money in your home country and move a s required.

you just qualified for the award "proved without reasonable doubt that he/she possesses a wealth of NO BLOODY idea"

[Naam]

Independent consultant John Sheehan yesterday advised Thai authorities to consider resuming the currency peg.

who, pray tell, is John Sheehan?

not this one i presume?

General John Sheehan isn't the first bigot to blame 'the gays ... The week's most ludicrous comment comes from US Army General John Sheehan, who has blamed the Srebrenica massacre on - wait for it - the gays.

http://blogs.telegraph.co.uk/culture/tomch...blame-the-gays/

[chiang mai]

In any other country with these problems, demonstrators getting free reign, tourists cancelling, major stores closed, economy wrecked, the currency would be dropping like a stone. The reason for its strength is quite clear to anyone.

lol, Economy wrecked? Not sure you are paying attention to economic fundamentals.

http://beta.mcot.net/cfcustom/cache_page/47561.cfm

Thai exports surge 41% in March; record high in 17 months.

..a trade surplus of about $1.54 billion in March and $2.11 billion in the first three months of 2010.

4 roads in Bangkok closed. The remaining 99.99% remain open and normal. Who needs Central World anyway, everyone is just shopping in Emporium instead.

Agreed, the most frequently asked question on TV of late, "why is the Baht so strong". Folks who say they don't understand why the Baht is so strong simply aren't looking at the facts or indeed even trying to understand why it is so, mostly what I think they are really saying is, God, I wish it were a lot weaker. But honestly, I do believe that those people are the ones who look at Thailand with a very surface view, sun, sea, booze and available women and that's all there must be here because it's all so dirty and inefficient and corrupt, nonsense.

Regarding trying to understand, well it is rather difficult to get to grips with, I mean only this week we've had reports from official sources, one saying GDP growth will be 4% or higher, whilst today I believe the figure is 2%. I mean what chance of understanding? Also how reliable are Thai figures, bearing in mind tourism is taken to represent 6% of GDP- they're having a laugh aren't they!

Either way is 4% good then ?, I'd have thought it quite poor all things considered. I'm also beginning to wonder what the relationship between GDP and profit is. GDP I reckon equates to turnover only in my mind. So all this extra growth might amount to nothing much, whereas all those fat profit margins in tourism , much of it staying in the local economy may be sorely missed- I don't know just speculating, but that's the argument, nobody on this board seems to know.

Quite right about Thailand's admirable foreign reserves and balances, but how many times is good news going to be factored in to the currency price, meanwhile it's had yet another downgrade. So what of fundamentals now!.

CM- It is a corrupt society, this is not a matter of idle speculation. Last report I read it was 11 out of 13 in an already rather corrupt segment of the world, and for that reason things are rather inefficient. That rather nice story abot the explosive detector that didn't work was a rather nice example of what goes on day in and day out and in fact is seen as the norm for doing business here.

But supposing all is correct, ok, how much longer do you think the poor will put up with being under paid slaves to Ford or Toyota or whoever, they're out on the steets now for heaven sake! And Thailand is rapidly becoming less and less price competitive, no way will the arrow just shoot upwards.

Agreed, BUT, you think the UK is not also a corrupt society, at least here the locals make no bones about the matter and openly admit that's the case and then get on with life.

[chiang mai]

There ares some reasonable opinions here but most are off the mark. My take is this . As messed up as Thailand is, the baht is not the issue at all. Dollar, Euro and /sterling are in near freefall with minor corrections along the way. The tiny baht is of no consequence at all, they just are reaping the benefits. As to the Thai central bank intervention, not a chance , just too small to sell into the market to control the rate,. Not near enough reserves. Only the Chinese can do that. Follow the experts, Rodgers, Etc. to see where this is going. Keep your money in your home country and move a s required.

you just qualified for the award "proved without reasonable doubt that he/she possesses a wealth of NO BLOODY idea"

Certainly gets my vote although there are elements of the post that make sense such as "move as required".

[Sunbelt Asia]

The Nation has this dead wrong. Perhaps a bad typist, but it is NOWHERE NEAR a 22-month high. The USD/THB hit 36.29 on March 3, 2009.

[Deeral]

A "cheap baht" is a double edged sword anyhow - not that the Thai govt can achieve that or anything without going back to the 80s - a cheap baht will mean imports cost more and one thing Thailand needs a lot of is oil which it will have to import.

also most raw materials for production.

I think anything other than a free-floating baht would be about as likely as ..... Abhisit becoming the next PM

[hjvdhoef]

When everything is over with the red shirts,the baht is going 29 against the U.S dollar.

I love it.

[Deeral]

I always think that making predictions is fuyn - sometimes they come true and they you can claim - quite erroneously - that it happened for the reasons you suggested - which of course it didn't - but if you DON"T give any reasons, that's even better because no-one will know if you were right or just a "lucky guesser"

[Pib]

When everything is over with the red shirts,the baht is going 29 against the U.S dollar.

I love it.

Wow...and thanks for all the rationale behind your WAG.

[Shotime]

When everything is over with the red shirts,the baht is going 29 against the U.S dollar.

I love it.

Wow...and thanks for all the rationale behind your WAG.

Maybe political chaos, civilians being killed in the commercial center of the capital, and a closed commercial center is the answer to the financial meltdown.

What do you mean you love it?

[retarius]

Listen the Thanksin and redshirts have been doing their best to weaken the baht so that farangs can get more baht for their sterling, us and oz $ so that they can buy more Chang beer...but do they get any thanks from the folks on TVF...no nothing but slagging off...it will serve you all right if they accept Abhisity's deal and the baht soars...

Edited May 4, 2010 by retarius

[Gambles]

and how would you implement that in a "free trade economy"??

just ask China ?

[Gambles]

There ares some reasonable opinions here but most are off the mark. My take is this . As messed up as Thailand is, the baht is not the issue at all. Dollar, Euro and /sterling are in near freefall with minor corrections along the way. The tiny baht is of no consequence at all, they just are reaping the benefits. As to the Thai central bank intervention, not a chance , just too small to sell into the market to control the rate,. Not near enough reserves. Only the Chinese can do that. Follow the experts, Rodgers, Etc. to see where this is going. Keep your money in your home country and move a s required.

I agree that Asian currencies are in a strengthening phase because of much better fundamentals.

Baht is a part of this but has underperformed the region.

BoT do intervene to maintain currency stability and in a market of this size they can make a significant impact over the short term. The BoT have far greater influence on the Baht than the PBOC do over the US$.

Keeping money in your home country (I assume you mean home currency too??) and moving as required would make no sense at all in the context of your comments about $, Eur and GBP - why would you want to hold a free-falling currency?

Global assets yes but a proportion should be hedged to THB if this is your base currency.

[Gambles]

For a country where the export markets and tourism are of prime importance this would be an eminently sensible policy to adopt. We can therefore state with some certainty it will not be adopted.

Doh!

You got me there!

[Gambles]

Sterling is being kept low to ease trade and improve British exports. 6 months and it will start to rise again. Good long term investment.

it's porbably a better bet than Euro but frankly longer term I'd rather take Asean currencies than either....

[Gambles]

Independent consultant John Sheehan yesterday advised Thai authorities to consider resuming the currency peg.

who, pray tell, is John Sheehan?

not this one i presume?

General John Sheehan isn't the first bigot to blame 'the gays ... The week's most ludicrous comment comes from US Army General John Sheehan, who has blamed the Srebrenica massacre on - wait for it - the gays.

http://blogs.telegraph.co.uk/culture/tomch...blame-the-gays/

No

It's the ex-Lehman Bros banker

[Gambles]

There ares some reasonable opinions here but most are off the mark. My take is this . As messed up as Thailand is, the baht is not the issue at all. Dollar, Euro and /sterling are in near freefall with minor corrections along the way. The tiny baht is of no consequence at all, they just are reaping the benefits. As to the Thai central bank intervention, not a chance , just too small to sell into the market to control the rate,. Not near enough reserves. Only the Chinese can do that. Follow the experts, Rodgers, Etc. to see where this is going. Keep your money in your home country and move a s required.

you just qualified for the award "proved without reasonable doubt that he/she possesses a wealth of NO BLOODY idea"

Certainly gets my vote although there are elements of the post that make sense such as "move as required".

I thought that was the worst bit! (sorry consna)