Will The Pound Go Higher

[Abrak]

Don't you just love the experts who have "in-depth knowledge" but fail to predict a price in case they are wrong.

I predicted 54, it got to 52, many were saying we would never see 50 again .............

September is usually the best month of the year for UKP/Baht .... I'm still waiting for 54

But will wimp out in the middle of September if it doesn't make my prediction.

How far does that seasonality go back? Does it extend to 1990 or is it more recent? As we are supposed to make a prediction, I will go for 32.41 in 2020.

[IMA_FARANG]

No, it will stay at 16 ounces to a pound.

[elliss]

60 by year end thats a certainty.

dream on ..

as the bank of england is predicting , or should i say

preying for a growth of 2 per cent / over the next year .

this is crap growth ,stagnent,,, compared to the economical growth in thailand .

just look at the industries that have left europe to open up in SEA.

MY TUPPENCE WORTH ,

i think we will be very lucky if we achieve

a small leo for a £ .. 55 bht .

[chiang mai]

And I'll repeat my long standing mantras:

35, +/- 10% within a decade, and,

If you can get 50, take it.

[Abrak]

And I'll repeat my long standing mantras:

35, +/- 10% within a decade, and,

If you can get 50, take it.

That sounds like a 'forecast' rather than a 'prediction'.

Sarahsbloke, I am not being irritating about the seasonality. I have absolutely no idea about GBP/baht seasonality but I do have a vague idea about GBP seasonality. Traditionally March used to be the worst month as everyone took money out of the country in front of tax returns. September was the second worst month, which makes it surprising that it is the best GBP/baht month. However the statistics are heavily distorted by September 1992 (black Wednesday) where sterling fell 20% in the month. So I suspect you are probably the only person on this thread with GBP/baht seasonality knowledge and I only wish to know how statistically significant it is.

Edited August 16, 2010 by Abrak

[chiang mai]

And I'll repeat my long standing mantras:

35, +/- 10% within a decade, and,

If you can get 50, take it.

That sounds like a 'forecast' rather than a 'prediction'.

Not especially, I think there has to be a reference point for any guess and in the absence of any other, 35 is a good historic marker, hence the +/- 10% to put it into the prediction camp. And so what if it's incorrect, the direction and trend is the important thing, I think.

[Abrak]

Not especially, I think there has to be a reference point for any guess and in the absence of any other, 35 is a good historic marker, hence the +/- 10% to put it into the prediction camp. And so what if it's incorrect, the direction and trend is the important thing, I think.

I agree with you entirely apart from a prediction is essentially a prophecy while you are making a forecast based on various parameters and the variability of those parameters as well as a recognition that you are generally expecting a movement in a certain direction. So I wish to state that if my prediction comes true I am a prophet while if your forecast comes true you have simply assessed the underlying fundamentals to a reasonable degree of accuracy. I actually used a calculator in my prediction by the way.

[chiang mai]

Not especially, I think there has to be a reference point for any guess and in the absence of any other, 35 is a good historic marker, hence the +/- 10% to put it into the prediction camp. And so what if it's incorrect, the direction and trend is the important thing, I think.

I agree with you entirely apart from a prediction is essentially a prophecy while you are making a forecast based on various parameters and the variability of those parameters as well as a recognition that you are generally expecting a movement in a certain direction. So I wish to state that if my prediction comes true I am a prophet while if your forecast comes true you have simply assessed the underlying fundamentals to a reasonable degree of accuracy. I actually used a calculator in my prediction by the way.

You used a calculator to produce a prophecy, whatever is the world coming to! OK, I'm going to rename my call as a "foreiction".

All joking aside, your point is well taken.

[Abrak]

You used a calculator to produce a prophecy, whatever is the world coming to! OK, I'm going to rename my call as a "foreiction".

All joking aside, your point is well taken.

And yours too. Clearly if I was a prophet I wouldnt need a calculator.

And really placing a number on things is pretty ridiculous (although I realize that there might be traders with good knowledge as to short term movement). It is very clear that the Thai baht is undervalued against GBP and Asian currencies cannot expect to be undervalued indefinitely. Of course the UK might deflate and Thailand might inflate and maybe it might even buy the UK. Actually I am quite keen for Thailand to use its excess forex reserves to buy BP.

[lannarebirth]

You used a calculator to produce a prophecy, whatever is the world coming to! OK, I'm going to rename my call as a "foreiction".

All joking aside, your point is well taken.

And yours too. Clearly if I was a prophet I wouldnt need a calculator.

And really placing a number on things is pretty ridiculous (although I realize that there might be traders with good knowledge as to short term movement). It is very clear that the Thai baht is undervalued against GBP and Asian currencies cannot expect to be undervalued indefinitely. Of course the UK might deflate and Thailand might inflate and maybe it might even buy the UK. Actually I am quite keen for Thailand to use its excess forex reserves to buy BP.

I think it's a given that Thailand will inflate, but I don't think it means that it moves down against western currencies. I wish I had the balls to move more money here.

[chiang mai]

You used a calculator to produce a prophecy, whatever is the world coming to! OK, I'm going to rename my call as a "foreiction".

All joking aside, your point is well taken.

And yours too. Clearly if I was a prophet I wouldnt need a calculator.

And really placing a number on things is pretty ridiculous (although I realize that there might be traders with good knowledge as to short term movement). It is very clear that the Thai baht is undervalued against GBP and Asian currencies cannot expect to be undervalued indefinitely. Of course the UK might deflate and Thailand might inflate and maybe it might even buy the UK. Actually I am quite keen for Thailand to use its excess forex reserves to buy BP.

I think it's a given that Thailand will inflate, but I don't think it means that it moves down against western currencies. I wish I had the balls to move more money here.

That doesn't sound like you, what does the 200MA say?

[AnnyLing]

Don't you just love the experts who have "in-depth knowledge" but fail to predict a price in case they are wrong.

I predicted 54, it got to 52, many were saying we would never see 50 again .............

September is usually the best month of the year for UKP/Baht .... I'm still waiting for 54

But will wimp out in the middle of September if it doesn't make my prediction.

Back to 49ish today !

[gotlost]

48.88 GBP 31.51 USD BB

Edited August 16, 2010 by gotlost

[sarahsbloke]

My dilemma is currency fluctuation Vs investment income

I can make nothing on Thai baht sitting in my bank account in a year

I can make 6-12% on my GBP investments in a year

That means a trade at 52bht/UKP today is worth the same as a trade at 47bht/UKP next year

Last year I got 52bht/UKP and my investments made 12% ....... that cost me money (I effectively lost 12% on all the money I changed and didn't need)

So if the UKP/bht falls 6-12% in the next year I lose money by not adding to my Baht reserves, I don't need any more Baht until Feb 2011 and vice versa.

At 54bht/UKP I will take a gamble that the rate will only be 49bht/UKP next year

I don't think it's worth the gamble that the exchange rate next year will only be 45bht/UKP ....... at the moment.

Edited August 16, 2010 by sarahsbloke

[chiang mai]

My dilemma is currency fluctuation Vs investment income

I can make nothing on Thai baht sitting in my bank account in a year

I can make 6-12% on my GBP investments in a year

That means a trade at 52bht/UKP today is worth the same as a trade at 47bht/UKP next year

Last year I got 52bht/UKP and my investments made 12% ....... that cost me money (I effectively lost 12% on all the money I changed and didn't need)

So if the UKP/bht falls 6-12% in the next year I lose money by not adding to my Baht reserves, I don't need any more Baht until Feb 2011 and vice versa.

At 54bht/UKP I will take a gamble that the rate will only be 49bht/UKP next year

I don't think it's worth the gamble that the exchange rate next year will only be 45bht/UKP ....... at the moment.

If it helps any, Lloyds private clients newsletter and RBS economic reports are both citing GBP/USD at 1.450 in a year, RBS is calling GBP/USD at 1.45 by 1Q11, right or wrong it's more data to consider.

[sarahsbloke]

The pound was 1.42 to the Dollar when we got 70bht to the UKP.

I'm not a believer that the Dollar has any relevance to the bht/UKP exchange rate at all.

[Abrak]

I think it's a given that Thailand will inflate, but I don't think it means that it moves down against western currencies. I wish I had the balls to move more money here.

Seems to me a little bit of strange comment. I consider the baht a pretty 'hard currency' at the moment. Easier to justify investing in than the majors. I really dont think it takes balls to invest in it. In some respects you have to acknowledge that it is even immune from the crisis of confidence that has hit say the Euro or GBP despite say the political protests. The only reason it is soft is the dirty peg to the dollar. To some extent it shows stability and strength in aggregate.

Also Thailand is ethically non-inflation biased. We havent seen huge asset bubbles here and the BoT and MoF are very aware of the dangers. I am not happy how they are solving this equation but there is a serious legal issue involved.

[chiang mai]

The pound was 1.42 to the Dollar when we got 70bht to the UKP.

I'm not a believer that the Dollar has any relevance to the bht/UKP exchange rate at all.

[elliss]

[quo

Not especially, I think there has to be a reference point for any guess and in the absence of any other, 35 is a good historic marker, hence the +/- 10% to put it into the prediction camp. And so what if it's incorrect, the direction and trend is the importan

imo ,, we can forget about historic trends / established parameters etc ,

the economic / wealth balance has changed . there is no turning back .

[chiang mai]

[quo

Not especially, I think there has to be a reference point for any guess and in the absence of any other, 35 is a good historic marker, hence the +/- 10% to put it into the prediction camp. And so what if it's incorrect, the direction and trend is the importan

imo ,, we can forget about historic trends / established parameters etc ,

the economic / wealth balance has changed . there is no turning back .

Agreed, which is why I chose 35 instead of the 50 it is presently, or the 70 that it was a couple of years ago, or even the 85 or so that it was in '97 - I think economists refer to this as "reversion to the norm" or similar hence historic trends do have a role to play in all of this, albeit the cycle is fifteen years.

[KunMatt]

The pound was 1.42 to the Dollar when we got 70bht to the UKP.

I'm not a believer that the Dollar has any relevance to the bht/UKP exchange rate at all.

As far as I can understand it, the pound is not balanced directly against the Baht. The pound is weighed against the US$; the US$ is weighed against the Japanese Yen which is held to the THB.

So it goes GBP->USD->YEN->THB

Right now the USD is falling against the GBP and the Yen so there is not a great change in the GBP-THB exchange rate.

We need the Pound to be strong against the Dollar and the Dollar to be strong against the Yen for the exchange of Pound to THB to be really strong.

[chiang mai]

The pound was 1.42 to the Dollar when we got 70bht to the UKP.

I'm not a believer that the Dollar has any relevance to the bht/UKP exchange rate at all.

As far as I can understand it, the pound is not balanced directly against the Baht. The pound is weighed against the US$; the US$ is weighed against the Japanese Yen which is held to the THB.

So it goes GBP->USD->YEN->THB

Right now the USD is falling against the GBP and the Yen so there is not a great change in the GBP-THB exchange rate.

We need the Pound to be strong against the Dollar and the Dollar to be strong against the Yen for the exchange of Pound to THB to be really strong.

And the knee bone is connected to the thigh bone and the thigh bone is ...., sorry!

Sooo, JPY is held to THB you say, that's an interesting abstract thought, perhaps you could post some figures showing that to be true, say, the year end exchange rate for the past ten years, you might find it educational.

[inthepink]

The pound was 1.42 to the Dollar when we got 70bht to the UKP.

I'm not a believer that the Dollar has any relevance to the bht/UKP exchange rate at all.

Seeing as a financial institution would have to buy dollars with pounds before buying baht with the dollars, were you to trade with a bank in the foreign exchange market, it would seem obvious that the GBP/USD exchange rate is always relevant.

Over the last 10 years there has never been a time when the pound was trading at 1.42 dollars and 70 baht at the same time by the way.

Edited August 21, 2010 by inthepink

[KunMatt]

Sooo, JPY is held to THB you say, that's an interesting abstract thought, perhaps you could post some figures showing that to be true, say, the year end exchange rate for the past ten years, you might find it educational.

I'm just saying what I see on a daily basis. I know that the GBP and the THB are not directly connected, it all depends on how the pound fares against the US$ and vice verser.

Please tell me how it is if you know better because I would like to know.

And why it is that Thailand can have 2 months of protestors afftecting businesses and employment, a revolution in the midst and terrorism activities abound and their currency is rock solid, but the Bank of England will make a remark such as "the future may be a bit shaky" and BAM the GBP plummets 10% against the US$ because of it?

[Abrak]

Sooo, JPY is held to THB you say, that's an interesting abstract thought, perhaps you could post some figures showing that to be true, say, the year end exchange rate for the past ten years, you might find it educational.

I'm just saying what I see on a daily basis. I know that the GBP and the THB are not directly connected, it all depends on how the pound fares against the US$ and vice verser.

Please tell me how it is if you know better because I would like to know.

And why it is that Thailand can have 2 months of protestors afftecting businesses and employment, a revolution in the midst and terrorism activities abound and their currency is rock solid, but the Bank of England will make a remark such as "the future may be a bit shaky" and BAM the GBP plummets 10% against the US$ because of it?

Actually Chiang Mai was asking to try to either establish a theoretical or statistical link between the baht and the the yen.

Actually you answered your own lack of knowledge by saying the baht GBP relationship was based on the GBP, US$ relationship which implicitly implies the key relationship is the baht to theUS$. I marginally disagree with this theory simply because I think the key relationship is with the Yuan but we shall see.

As to you trying to relate the baht value to political events such as red shirt protests, you should at least appreciate that a currency is an economic phenomenon. As the political unrest has had no meaningful impact on either underlying growth or current account surpluses it is not surprising the currency has been unaffected.

Unfortunately GBP is likely to be volatile on the basis that there is little indication the economy can either grow or bebself financing. I do agree though that falling on the basis of things being a bit shaky is a discrepancy when underlying fundamentals indicate otherwise.

[chiang mai]

Sooo, JPY is held to THB you say, that's an interesting abstract thought, perhaps you could post some figures showing that to be true, say, the year end exchange rate for the past ten years, you might find it educational.

I'm just saying what I see on a daily basis. I know that the GBP and the THB are not directly connected, it all depends on how the pound fares against the US$ and vice verser.

Please tell me how it is if you know better because I would like to know.

And why it is that Thailand can have 2 months of protestors afftecting businesses and employment, a revolution in the midst and terrorism activities abound and their currency is rock solid, but the Bank of England will make a remark such as "the future may be a bit shaky" and BAM the GBP plummets 10% against the US$ because of it?

I think Abrak in post 85 answered your questions and reflected my view accurately, the key driver of GBP/THB is USD/GBP, trying to trace the link any further back becomes complex and creates distortions making subsequent links unworkable - also, it's important to test those currency relationships over several years to ensure they are sound, short term trends in a relationship can be very misleading.

As far as the political implications are concerned: the BOE has a policy of not intervening in FOREX markets to determine the level of Sterling preferring to let market forces determine its value. Instead, BOE manipulates the currency to a degree by releasing statements that either reassures or spooks the markets and the currency moves accordingly. The Thai Central Bank however intervenes actively in the FOREX market to ensure the value of THB (a significantly lesser currency) is maintained within a preferred range (against a basket of regional currencies). Given that the BOT currently has surpluses in most categories their work is mostly aimed at keeping the Baht down rather than trying to talk or push it higher, the currency implications of the recent riots were therefore not significant.

[KunMatt]

Sooo, JPY is held to THB you say, that's an interesting abstract thought, perhaps you could post some figures showing that to be true, say, the year end exchange rate for the past ten years, you might find it educational.

I'm just saying what I see on a daily basis. I know that the GBP and the THB are not directly connected, it all depends on how the pound fares against the US$ and vice verser.

Please tell me how it is if you know better because I would like to know.

And why it is that Thailand can have 2 months of protestors afftecting businesses and employment, a revolution in the midst and terrorism activities abound and their currency is rock solid, but the Bank of England will make a remark such as "the future may be a bit shaky" and BAM the GBP plummets 10% against the US$ because of it?

I think Abrak in post 85 answered your questions and reflected my view accurately, the key driver of GBP/THB is USD/GBP, trying to trace the link any further back becomes complex and creates distortions making subsequent links unworkable - also, it's important to test those currency relationships over several years to ensure they are sound, short term trends in a relationship can be very misleading.

As far as the political implications are concerned: the BOE has a policy of not intervening in FOREX markets to determine the level of Sterling preferring to let market forces determine its value. Instead, BOE manipulates the currency to a degree by releasing statements that either reassures or spooks the markets and the currency moves accordingly. The Thai Central Bank however intervenes actively in the FOREX market to ensure the value of THB (a significantly lesser currency) is maintained within a preferred range (against a basket of regional currencies). Given that the BOT currently has surpluses in most categories their work is mostly aimed at keeping the Baht down rather than trying to talk or push it higher, the currency implications of the recent riots were therefore not significant.

OK. Thanks very much for the info. Good to know.

[Abrak]

Sooo, JPY is held to THB you say, that's an interesting abstract thought, perhaps you could post some figures showing that to be true, say, the year end exchange rate for the past ten years, you might find it educational.

I'm just saying what I see on a daily basis. I know that the GBP and the THB are not directly connected, it all depends on how the pound fares against the US$ and vice verser.

Please tell me how it is if you know better because I would like to know.

And why it is that Thailand can have 2 months of protestors afftecting businesses and employment, a revolution in the midst and terrorism activities abound and their currency is rock solid, but the Bank of England will make a remark such as "the future may be a bit shaky" and BAM the GBP plummets 10% against the US$ because of it?

I think Abrak in post 85 answered your questions and reflected my view accurately, the key driver of GBP/THB is USD/GBP, trying to trace the link any further back becomes complex and creates distortions making subsequent links unworkable - also, it's important to test those currency relationships over several years to ensure they are sound, short term trends in a relationship can be very misleading.

As far as the political implications are concerned: the BOE has a policy of not intervening in FOREX markets to determine the level of Sterling preferring to let market forces determine its value. Instead, BOE manipulates the currency to a degree by releasing statements that either reassures or spooks the markets and the currency moves accordingly. The Thai Central Bank however intervenes actively in the FOREX market to ensure the value of THB (a significantly lesser currency) is maintained within a preferred range (against a basket of regional currencies). Given that the BOT currently has surpluses in most categories their work is mostly aimed at keeping the Baht down rather than trying to talk or push it higher, the currency implications of the recent riots were therefore not significant.

I slightly disagree with you at the margin. In that I do not believe the BoT is very actively intervening at the moment. The general rule of sterilisation is about 13% of money supply and the Bot reached 20%. At that point your position is so firmly established that you will clearly invite speculation against you. So I do not see much evidence of BoT intervention over the last 6 months. You can argue this is due to a dampening of economic and inflationary pressures but I think they knew the score if a bit too late.

[longway]

Does the Chinese governement have a hand in managing the value of the baht? They manage their currency against a supposedly 'secret' basket of currencies right? It would be logical that the baht is one of them.

Feel free to shoot down the idea. I am just curious.

[chiang mai]

Does the Chinese governement have a hand in managing the value of the baht? They manage their currency against a supposedly 'secret' basket of currencies right? It would be logical that the baht is one of them.

Feel free to shoot down the idea. I am just curious.

The Baht is too small of a currency to be considered in this context, it's value can be easily manipulated by the central bank at relatively low cost so no, I doubt seriously that the Chinese play a role in managing its value. What does exist in place of that however is a series of regional currency swaps that ensure trading partners in the region (ASEAN) are not damaged by regional currency fluctuations.