Baht weakens to new low in 2 years

[george]

Thai baht weakest in 10 months

BANGKOK: -- The Thai currency depreciated to its weakest level in 10 months on Thursday due to hefty selling out by foreign investors.

The Thai baht closed at Bt41.68-41.71 a US dollar yesterday after opening at Bt41.58-41.62 in the morning, according to financial executives.

"The 10-month weakest record of the Thai currency was due to hefty selling out by foreign investors who feared that risk factors, including continuing oil price hikes, could affect Thailand's economic prospects and performances of listed firms on the Stock Exchange of Thailand (SET)", they pointed out.

However, the depreciation of the Thai baht was in line with other currencies in the region, including the Japanese yen, the commercial banks' executives disclosed.

"It is possible that the Thai currency could weaken to Bt42 a US dollar", they said.

--TNA 2005-07-08

[dr_Pat_Pong]

Is it ominous George ? July 1997 revisited ?

[patricktan]

I use to sent back money to my home country every two month and I been losing money allt he while. Do yo have any better way to recomment?

[Head Snake]

Hasn't the euro and pound weakened significantly against the baht in the last few months?

I just remember thinking that all the europeans were getting more for their vacations than I was with my american dollars.

THe baht to US dollar change hasn't been real exaggerated in the last year. I'd say about steady. I mean, I don't "feel" any big change.

[AmeriThai]

Sounds like a fine time to take advantage of the exchange rate to me.

[george]

Thai Baht Falls on Oil, Current Account: World's Biggest Mover

BANGKOK: -- The Thai baht fell to its lowest in almost two years, the biggest fluctuation of any currency, on speculation importers will increase dollar purchases to pay for oil, widening the current-account deficit.

The baht has fallen 3.1 percent since the government on June 6 cut this year's economic growth forecast, citing the higher price of oil, most of which is bought from abroad. Thai unions yesterday said they may strike unless the minimum wage is raised to compensate for surging domestic fuel and transport costs that have left workers with less to spend on food.

``Importers have bought dollars as oil prices increase,'' weakening the baht, said Chatchawan Jumruswittayawong, a currency trader at Bank of Ayudhya Pcl in Bangkok. ``Sentiment on the baht is getting worse'' on concern the deficit will widen.

The baht slumped 0.8 percent to 42 against the dollar as of 10:12 a.m. Bangkok time, its weakest since Aug. 7, 2003. The currency may decline to 42.25 next week, Chatchawan said.

Central bank Governor Pridiyathorn Devakula on July 1 said Thailand's current-account deficit may reach $3.1 billion this year and $6.7 billion in 2006.

The country had a current-account shortfall of $1.56 billion in May, the third straight deficit, the central bank said on June 30. The deficit of $1.61 billion in April was the biggest gap since before the 1997 Asian financial crisis.

Crude futures fell as much as 54 cents, or 0.9 percent, to $60.19 a barrel after reaching a record $62.10 in New York yesterday. Prices are 55 percent higher than a year ago.

Unions

The decline in oil prices may be temporary before they rise to at least $65, said In Keun Kim, currency trader at ABN Amro Holding NV in Seoul.

The probability that crude prices will top $75 a barrel when the December crude contract expires is 21 percent, according to Adam Sieminski and Michael Lewis, strategists at Deutsche Bank AG, up from 5 percent at the start of the year.

Unions will meet on July 10 to decide on a possible strike should the government fail to meet their demands for higher wages, Wilaiwan Sae-tia, head of the Thai Labor Federation, which represents more than 1 million factory workers, said in an interview yesterday.

A falling baht raises the cost of imports, threatening to push up inflation.

Thailand's inflation accelerated to a six-year high in June as fuel prices made transport more expensive. The consumer price index rose 3.8 percent from a year ago after climbing 3.7 percent in May, Karun Kittisathaporn, permanent secretary of the commerce ministry, said on July 1.

`Obvious Example'

The Bank of Thailand, which predicts inflation will quicken to 4 percent this year from 2.7 percent in 2004, has raised its benchmark interest rate five times in 10 months to help stem price gains.

The central bank increased its rate by a quarter percentage point to 2.5 percent, the highest since December 2001, at its last policy meeting on June 9. Higher interest rates are needed to attract overseas funds and help plug the widening current-account deficit, Governor Pridiyathorn Devakula said on July 1.

Some investors have sold Thai shares on concern rising interest rates will curb spending and investment, helping to slow economic growth.

Money managers abroad in the past four days sold a net 3.8 billion baht ($90 million) of Thai equities after net purchases last week, according to stock exchange figures.

``Soaring oil prices are a fundamental negative for Asia,'' said Callum Henderson, a currency strategist at Standard Chartered Plc in Singapore. ``That will continue to cause a deterioration in the trade and current-account balances in many countries and the most obvious example is Thailand.''

The world's biggest movers are based on changes in price or yield and are screened for the size of the market and amount of daily trading.

--Bloomberg 2005-07-08

[Artisi]

If anybody watched "The Editors" on ABC Asia-Pacific TV show last night where Taksins performance since the last election was discussed - you would understand why the bht is falling - and will probably continue to fall for sometime yet.

Welcome to the "real-world" PM Taksin - where you don't have and will never have control.

[Guest fj2003]

sorry head snake but if the baht losses vs the dollar he losses vs the euro also because other wise the currency system is not working this is never only a one way direction

this if i remember my calculation at school in the right way if this is not the case please someone explain me more about

[Khun Larry]

IMO this is only the beginning.

Hopefully we will hit 45 by November, possibly 50 thereafter if the tourists stay away.

Condo prices sure to sink.

[Khun Larry]

sorry head snake but if the baht losses vs the dollar he losses vs the euro also because other wise the currency system is not working this is never only a one way direction

<{POST_SNAPBACK}>

Last year the baht gained against the dollar and lost against the Euro. Depends on relative strength of the economies.

[h90]

since 3 years I am theaching that to my staff. But it does not go into their heads.

Now they start to don't like Taksin, but not for the real reasons, for some weired other reasons......

If anybody watched "The Editors" on  ABC Asia-Pacific TV show last night where Taksins performance since the last election was discussed - you would understand why the bht is falling - and will probably continue to fall for sometime yet.

Welcome to the "real-world" PM Taksin - where you don't have and will never have control.

<{POST_SNAPBACK}>

[Guest fj2003]

QUOTE(fj2003 @ 2005-07-08 05:14:41)

sorry head snake but if the baht losses vs the dollar he losses vs the euro also because other wise the currency system is not working this is never only a one way direction

Last year the baht gained against the dollar and lost against the Euro. Depends on relative strength of the economies.

this was due to the fact that the euro was in troubble with the dollar and not the baht

but now it is the baht vs euro and dollar but the baht is still closer to the dollar

have a look on all the diver of padi (pay a dollar in)

but i am sure that the bomb blasting of yesterday ( my condolence to all families ) will have an effect also so let see how it will go on

but i wish all expats will get more of their money they exchange into thai baht

on the other side people who live here and earn here have to work harder to go back to visit there familie or just to stay back home for a while ( as long they are paid here in thailand and in thb)

[TokyoT]

sorry head snake but if the baht losses vs the dollar he losses vs the euro also because other wise the currency system is not working this is never only a one way direction

this if i remember my calculation at school in the right way if this is not the case please someone explain me more about

<{POST_SNAPBACK}>

If the Euro loosed ground faster against the dollar than the Thai Baht looses against the dollar; then the Thai Baht can loose against the dollar, and still gain against the Euro.

May 2nd 2005:

1 USD = 0.7779 Euro

1 USD = 39.254 Baht

1 Baht = 0.0197 Euro

June 2nd 2005:

1 USD = 0.8196 Euro

1 USD = 40.785 Baht

1 Baht = 0.0201 Euro

July 2nd 2005:

1 USD = 0.8370 Euro

1 USD = 41.429 Baht

1 Baht = 0.0202 Euro

So the Baht has continued to gain ground on the Euro, and both have continued to loose ground against the Dollar.

[Two Roads]

Thai baht weakest in 10 months

However, the depreciation of the Thai baht was in line with other currencies in the region, including the Japanese yen, the commercial banks' executives disclosed.

Not true....the baht was the second worse performing currency in Asia vs. the Dollar. Clearly underperforming the market.

[dave111223]

Good news for those of us exporting to the US.

[VanZam]

Both the US dollar and the Pound have fallen following the bomb blasts in london.

Although a sharper drop than per usual, this trend continues, and has done for a number of years.

Lets just thank the freely avaliale line of credit all thais seems to have access too, after all, who could live here without the essential BMW or Merc.

97' will happen again? your ###### right it will.

[Khun Larry]

Good news for those of us exporting to the US.

<{POST_SNAPBACK}>

Very Very True

But I think the US has enough chop stix for now

[h90]

bad news for those of us having most of their money in euro

Good news for those of us exporting to the US.

<{POST_SNAPBACK}>

[h90]

grrr I must move my money out of thailand grrr

Both the US dollar and the Pound have fallen following the bomb blasts in london.

Although a sharper drop than per usual, this trend continues, and has done for a number of years.

Lets just thank the freely avaliale line of credit all thais seems to have access too, after all, who could live here without the essential BMW or Merc.

97' will happen again? your ###### right it will.

<{POST_SNAPBACK}>

[Neeranam]

Is it ominous George ? July 1997 revisited ?

My money is on the same thing happening. Wait a minute, I don't have any money. Just as well I get paid by the goverment. It will make no difference to me, like 97.

[phastmike]

July 2nd 2005:

1 USD = 0.8370 Euro

1 USD = 41.429 Baht

1 Baht = 0.0202 Euro

So the Baht has continued to gain ground on the Euro, and both have continued to loose ground against the Dollar. 

<{POST_SNAPBACK}>

July 8th 2005:

1 Baht = 0.0198

After the French NO to European Constitution the Euro lost a little, both against USD and Thai Baht but not that much and seems to be recovering already.

[Heng]

Good news for those of us exporting to the US.

chaiyo!

[Anon999]

Hasn't the euro and pound weakened significantly against the baht in the last few months?

I just remember thinking that all the europeans were getting more for their vacations than I was with my american dollars. 

THe baht to US dollar change hasn't been real exaggerated in the last year.  I'd say about steady.  I mean, I don't "feel" any big change.

<{POST_SNAPBACK}>

The short answer is YES! Sterling has depricated against the $US a lot since getting near to $2 it is now less than 1.90. On Friday 1st July I got over 74 baht, today, one week later it is down to 72.68 baht for travellers cheques, altough the bomb blasts in London yesterday probably had some effect.

[denny59]

FANTASTIC I SAY..JUST HOPE IT CONTINUES TO FALL AND STAYS LOW UNTIL I RE-VISIT IN AUGUST...GOOD FOR TOURISTS CASHING DOLLARS,,OUR MONEY GOES FARTHER.

[sajal]

we are exporters in thailand....the baht is weakening against the dollar....our major buyer country's currency is getting stronger....just that its a pity not much trade going on at this moment.....

[warriors]

Well 2 weeks ago the New Zealand $ was 29 bhat now its 27.1 bhat so is New Zealand $ free falling to along with the bhat. I don't think so, I think the baht is getting sronger if you are from N.Z.

Lucky I sent over 10,000 nz at 28.4 three weeks ago. I wish I sent 100,000 Oh well my 6 months there will be ok on 50 cent noodles.

[Darkling]

It`s the IMF`s fault, Who else can they blame?

[Khun Bob]

If the depreciation of the baht is predominantly dependent upon the pricee of oil - it looks like it is going down more, but the dollar will gain short term, keeping the baht up a bit

Energies

Crude Oil trades above $61 on concerns Hurricane Dennis will disrupt oil shipments and output in the Gulf of Mexico. Royal Dutch/Shell Group, BP Plc Apache and Transocean Inc are evacuating workers from oil rigs and platforms as Dennis was upgraded to Category 4 by the National Hurricane Center. Yesterday's inventories saw a slight decline just after the figures were announced where it traded to a session low of $59,05/bbl but closed at $60,73/bbl in New York. The critical test of $62.10 high yesterday will likely trigger more buying and all eyes will be on Hurricane Dennis.

Trade Strategy: Buy QMQ5 60.50 - 61.05. Stop below 59.45. Target 64.20

Market showing lots of risk-willingness despite powerful Hurricane

Dennis' threat to oil markets and today's US Employment Data. USD may rally further.

London bombings are a human tragedy, but will have no effect on financial markets. Long GBP/CHF is a way to express this view.

Edited July 8, 2005 by Khun Bob

[mnoorsapl]

Sounds like a fine time to take advantage of the exchange rate to me.

<{POST_SNAPBACK}>

Think so too..

[marquess]

Well 2 weeks ago the New Zealand $ was 29 bhat now its 27.1 bhat so is New Zealand $ free falling to along with the bhat. I don't think so, I think the baht is getting sronger if you are from N.Z. 

Lucky I sent over 10,000 nz at 28.4 three weeks ago. I wish I sent 100,000 Oh well my 6 months there will be ok on 50 cent noodles.

Three and a half years ago it was 17/18 Baht to 1 Kiwi $. The baht is on a long term downward trend. Even when there is not problem with oil, there is always someone manipulating the currency in the background for "exports."

Edited July 8, 2005 by marquess