How Can The Pound Still Be Falling Vs. Baht

[simcity]

relax.... friends....

the THB is range bound, that i can assure you....

if you have extra money in the bank....

change it into physical gold, but NOT GOLD COINS, won't be a bad idea....

Why NOT GOLD COINS ?

you paying a premium for it, less easy to sell as Thai gold bar bought in china town, the Opp could buy other currencies as well if he think the thai baht will go down.

edit, the gold part are if you live in thailand

In the UK and most of the west you pay CGT on bullion, currently 18% but soon to be 40%. Best to pay the premium.

I do not know UK fiscal arrangement & how people setup they CGT, It is to the individual to see.

[Gary A]

Why is the baht strong? Thailand does NOT have huge numbers of people on the dole and is not a socialist country. Thailand produces more products for export and exports are considerably greater than imports.

Farangs tend to exaggerate tourist money importance to the Thai economy.

[wasabi]

The UK is more 3rd world than Thailand, they just haven't realized it yet.

[Gambles]

Political risk curbs country's potential

Pornnalat Prachayakorn

Political risk curbing country's potential

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, according to Scott Campbell, an S&P award-winning fund manager.

Foreign investors remain bullish on the growth of emerging markets including Asia, Mr. Campbell said at a briefing in Bangkok this week.

''Asia along with other emerging markets will continue to be the best place for investment for the next 30 to 40 years,'' said Mr. Campbell, director of the international fund manager MitonOptimal.

''Over the past 10 years, the stock market in the west has done nothing while Asian stock markets have grown three- to fourfold.''

Although Thailand's economic fundamentals are attractive, political risk is seen as the major obstacle on the path to a better economic position.

Mr Campbell said that since April last year, there has been a significant rebound in Asian currencies.

''Currency is a barometer of political risk and the Thai baht has been pretty much flat [trade-weighted basis] since last year,'' he said. ''If the political risk gets sorted out, then you'll see the Thai baht appreciate just to catch up with what everything else has done.'' The fundamentals for the whole Asian region are still very positive but Thailand could lag because of political instability, he added.

Paul Gambles, managing director of the consultancy MBMG International Co, said 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.

Mr. Gambles quoted John Sheehan of the consultancy Global Market Asia, who observed 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,'' Mr. Gambles said.

[khunjake]

Why is the baht strong?

Could it be because the Thai Central Bank has a rather large surplus of reserves and doesn't inflate the currency in a ridiculous manner like other central banks do? All political struggles aside, the Thai economy is still growing and its fiscal policy is far better than those of its Western counterparts. Thailand is not alone in all of this, have a look at the Malaysian, Indonesian and South Korean currencies as well.

[ESB7]

The coalition was formed less than a week ago. Normality needs to take suit and some negative pulicity about tax breaks for the poor wiping out any other measures due to bring the deficit down have kept the money markets from moving on Sterling. Have patience, market slush funds are loaded and ready once the budget is due. A month from now will be a different story.

[MartinBKK]

I keep a spread of 3 currencies - EURO , GBP and USD. All of these have problems at the moment but being naturally risk averse i feel like this is the best strategy for me. In the long term i expect the Pound to outperform the EURO and the USD.

2 years ago the USD was finished according to posters on this forum and other so called "experts" on Bloomberg/CNBC etc. Now it looks as though the USD is entering a bull run and short term, looks the best bet. Fact is nobody can predict where currencies will be even a year from now let alone in 5 or 10 years time.

Although i have lived in Thailand for 5 years and plan to live here for the forseeable future i would never keep much Baht as i anticipate years of instability from here. This is just my opinion , i could absolutely be wrong and if the Baht does move against me and Thailand becomes too expensive, i would look for another place to live. If you have a wife, children and cannot get away from Thailand then having no Baht at all is probably not a good idea, regardless of what you think the future holds.

Cheers

[Naam]

I keep a spread of 3 currencies - EURO , GBP and USD. All of these have problems at the moment but being naturally risk averse i feel like this is the best strategy for me. In the long term i expect the Pound to outperform the EURO and the USD.

2 years ago the USD was finished according to posters on this forum and other so called "experts" on Bloomberg/CNBC etc. Now it looks as though the USD is entering a bull run and short term, looks the best bet. Fact is nobody can predict where currencies will be even a year from now let alone in 5 or 10 years time.

Although i have lived in Thailand for 5 years and plan to live here for the forseeable future i would never keep much Baht as i anticipate years of instability from here. This is just my opinion , i could absolutely be wrong and if the Baht does move against me and Thailand becomes too expensive, i would look for another place to live. If you have a wife, children and cannot get away from Thailand then having no Baht at all is probably not a good idea, regardless of what you think the future holds. Cheers

but during the last five years you have lost a big bundle.

[ESB7]

I keep a spread of 3 currencies - EURO , GBP and USD. All of these have problems at the moment but being naturally risk averse i feel like this is the best strategy for me. In the long term i expect the Pound to outperform the EURO and the USD.

2 years ago the USD was finished according to posters on this forum and other so called "experts" on Bloomberg/CNBC etc. Now it looks as though the USD is entering a bull run and short term, looks the best bet. Fact is nobody can predict where currencies will be even a year from now let alone in 5 or 10 years time.

Although i have lived in Thailand for 5 years and plan to live here for the forseeable future i would never keep much Baht as i anticipate years of instability from here. This is just my opinion , i could absolutely be wrong and if the Baht does move against me and Thailand becomes too expensive, i would look for another place to live. If you have a wife, children and cannot get away from Thailand then having no Baht at all is probably not a good idea, regardless of what you think the future holds.

Cheers

3 currencies is always the way to go for Expats. Good post.

[punisher]

Getting back to the OP's question:

UK = democracy, good political situation

Thailand = no democracy, horrendous political situation

This has little to do with the economy.

UK = poor economy, poor economic policies (much the same can be said for Europe and the US)

Thailand = pretty good economy and those in charge haven't made any major blunders recently

When the economic situation reverses, the Pound (Euro and Dollar too) will go up against the Baht.

I just wonder why everybody says thai economy is doing good,it is just not true,if u look around or talk to people from eastern seaboard u will know that,Thai government says economy is doing good,does not mean its true

[el jefe]

Getting back to the OP's question:

UK = democracy, good political situation

Thailand = no democracy, horrendous political situation

This has little to do with the economy.

UK = poor economy, poor economic policies (much the same can be said for Europe and the US)

Thailand = pretty good economy and those in charge haven't made any major blunders recently

When the economic situation reverses, the Pound (Euro and Dollar too) will go up against the Baht.

I just wonder why everybody says thai economy is doing good,it is just not true,if u look around or talk to people from eastern seaboard u will know that,Thai government says economy is doing good,does not mean its true

Talking to dozens of people who earn their living in mom-and-pop shops doesn't tell you much about the overall economy.

I'm in New York right now. The number of vacant storefronts is at an all time high. If I ask everyone I pass in the street what they think of the US economy, you would think we're in the middle of the Great Depression.

The Thai economy is doing better than most western economies, which are propped up by govt stimulus plans that can't last forever. Thailand's exports exceed its imports. The Baht will remain stronger than most western currencies.

I was trying to keep it simple.

[el jefe]

Getting back to the OP's question:

UK = democracy, good political situation

Thailand = no democracy, horrendous political situation

This has little to do with the economy.

UK = poor economy, poor economic policies (much the same can be said for Europe and the US)

Thailand = pretty good economy and those in charge haven't made any major blunders recently

When the economic situation reverses, the Pound (Euro and Dollar too) will go up against the Baht.

But surely the Thai economy must be suffering big time. Tourist numbers are way down and must be falling even faster now. Also, currencies often move because of knee jerk reactions. It's vert surprising that the bhat is so strong against the GBP. Yes, the UK is almost bankrupt, but it has been for a few years. So why should the bhat strengthen even further now that the UK is sorting out the economy and the Thai economy is on the slide. It just doesn't make sense. Maybe it will collapse some day soon. Or maybe people are just betting on the situation being resolved very soon and the tourists returning.

"the UK is sorting out the economy" Really???

If tourism is 8% of the Thai economy and tourism is off by 40% for 6 months (a very pessimistic outlook), that would reduce the overall economy by 1.6% Double that for the trickle down effect and Thailand loses 3.2% of it's growth. Thailand would probably have 6% growth with a stable govt, more if the world economy improves. That leaves Thailand with 2.8% growth. What is the UK's projected growth rate?

The article quoted in post 34 says that if not for the persistent political problems in Thailand, the baht would be stronger. That's probably true You expect the baht to go down, but in reality it is rising much slower than it otherwise would. Does that make it more understandable to you?

And I hope you're not expecting the currency markets to always have a knee jerk reaction. Obviously in the case of the baht, there has not been one.

Edited May 16, 2010 by el jefe

[Gambles]

Getting back to the OP's question:

UK = democracy, good political situation

Thailand = no democracy, horrendous political situation

This has little to do with the economy.

UK = poor economy, poor economic policies (much the same can be said for Europe and the US)

Thailand = pretty good economy and those in charge haven't made any major blunders recently

When the economic situation reverses, the Pound (Euro and Dollar too) will go up against the Baht.

I just wonder why everybody says thai economy is doing good,it is just not true,if u look around or talk to people from eastern seaboard u will know that,Thai government says economy is doing good,does not mean its true

Export numbers seem to be holding up well

There is undoubtedly a cost to the current problems and it may be that the escalation since Friday will cause that to be revised with higher than expected foreign sellers on the SET and subsequently higher capital flos out of Thailand in the next few days softening the Baht slightly.....

[Gambles]

Getting back to the OP's question:

UK = democracy, good political situation

Thailand = no democracy, horrendous political situation

This has little to do with the economy.

UK = poor economy, poor economic policies (much the same can be said for Europe and the US)

Thailand = pretty good economy and those in charge haven't made any major blunders recently

When the economic situation reverses, the Pound (Euro and Dollar too) will go up against the Baht.

But surely the Thai economy must be suffering big time. Tourist numbers are way down and must be falling even faster now. Also, currencies often move because of knee jerk reactions. It's vert surprising that the bhat is so strong against the GBP. Yes, the UK is almost bankrupt, but it has been for a few years. So why should the bhat strengthen even further now that the UK is sorting out the economy and the Thai economy is on the slide. It just doesn't make sense. Maybe it will collapse some day soon. Or maybe people are just betting on the situation being resolved very soon and the tourists returning.

"the UK is sorting out the economy" Really???

If tourism is 8% of the Thai economy and tourism is off by 40% for 6 months (a very pessimistic outlook), that would reduce the overall economy by 1.6% Double that for the trickle down effect and Thailand loses 3.2% of it's growth. Thailand would probably have 6% growth with a stable govt, more if the world economy improves. That leaves Thailand with 2.8% growth. What is the UK's projected growth rate?

The article quoted in post 34 says that if not for the persistent political problems in Thailand, the baht would be stronger. That's probably true You expect the baht to go down, but in reality it is rising much slower than it otherwise would. Does that make it more understandable to you?

And I hope you're not expecting the currency markets to always have a knee jerk reaction. Obviously in the case of the baht, there has not been one.

Yep - except that if there is a good outcome to the current crisis then expect a big knee-jerk rebound in the SET and a more gradual increase in the Baht

Biggest Baht weakening event is likley to be a second leg down/double dip globally in which case expect flight to USD - however that almost certainly won't help Sterling