US Dollar 'Expected To Recover' This Year

[webfact]

US dollar 'expected to recover' this year

By WICHIT CHAITRONG

THE NATION

The baht and other Asian currencies are expected to stabilise this year as the US dollar recovers, said Christy Tan, forex strategist at the Bank of America Merrill Lynch.

Tan predicted that the baht would be valued at 29.80 per US dollar by the end of the first quarter and weaken to 30.20 by the end of the third quarter and to 30.50 by the end of the year.

The Malaysian ringgit, the baht and the Indonesian rupiah last year appreciated more than 10 per cent against the dollar.

With the US economy expected to be in better shape this year and lower liquidity in the market, the dollar is expected to recover against other currencies. The US economy is expected to expand at a higher rate than the European economy, she said.

Research by the Bank of America also projected that Chinese authorities would this year revalue the yuan gradually. The yuan is estimated by the bank to be undervalued by about 3 per cent currently, she said. The exchange rate is expected to be 6.55 per dollar by the end of the first quarter and 6.40 by the end of the year.

The world would be divided into two groups - emerging markets with relatively high growth and inflation, and developed economies with fragile recoveries and less inflationary pressure.

There are risks, such as the deepening debt crisis in the euro zone; Spain could be the next country to ask for support from the European Union and the International Monetary Fund. Another risk is a double-dip in the US economy and unexpected tightening of monetary policy by the US Federal Reserve. Early elections in Thailand, Malaysia and Singapore could also spring a surprise, Tan said.

Investors may still have the appetite to seek higher yields, which could invite further capital flows into Asia. There is also the possibility of a reversal of capital flows due to increasing risk of capital controls by central banks in Asia, she noted. Emerging markets, particularly China and India, face challenges to contain inflation driven by rising commodity prices, such as food and oil, she said.

The US Federal Reserve does not face a tough task this year, as inflation is not a threat. However, the US administration faces tough challenges and the market will be watching closely whether Washington will expand its stimulus package, maintain the status quo or withdraw the package, Tan said.

Bank of Thailand Assistant Governor Paiboon Kittisrikangwan differed from Tan, saying yesterday that volatility in the foreign-exchange market should be greater this year.

"As we have seen [from the large amount of capital outflows, which weakened the baht rapidly] in the past one to two days, it is not a one-way bet any more. Risk appetites, either an increase or a decline, could bring about a reversal of capital flows," he said.

The central bank witnessed the sale of about Bt6 billion in the bond market on Tuesday.

Given developed countries' slower economic growth, low interest rates, and different fiscal and monetary policies, foreign capital usually flows into emerging countries with high economic growth, Paiboon said. Because of this currency risk, more than half of the export income has been hedged, while only 20 per cent of importers have struck hedging contracts.

-- The Nation 2011-01-13

[Jingthing]

30 looks good compared to 25 or 20. Go bucks!

[Chunky1]

recover against other currencies, maybe. not against gold.

[gotlost]

30.30 USD Super Rich.

[Pib]

Some stability in the baht-dollar exchange rate would be very nice. With the US economy slowly improving and the Thai economy decelerating in its growth, maybe an equilibrium point is being reached in the exchange rate which will allow the baht-dollar exchange rate to go basically sideways for an extended period....or not! Flip a coin.

Edited January 13, 2011 by Pib

[Jingthing]

What would the effect be on the dollar/baht if the Chinese let the yuan loose on the free market, not that they will?

[Misterwhisper]

Still shaking with excited nostalgia remembering an exchange rate of 56 THB to the greenback in December 1997. Then it was well above the 40 THB mark for several years before gradually weakening to 38 THB. From there on it was all downhill, but hey, above 30 THB to the $ is still better than the fixed exchange rate of 25 THB to the buck that prevailed literally for decades before the economic meltdown of August 1997.

[Pib]

Still shaking with excited nostalgia remembering an exchange rate of 56 THB to the greenback in December 1997. Then it was well above the 40 THB mark for several years before gradually weakening to 38 THB. From there on it was all downhill, but hey, above 30 THB to the $ is still better than the fixed exchange rate of 25 THB to the buck that prevailed literally for decades before the economic meltdown of August 1997.

However, but, when the exchange rate was at 25 baht and even at 20 baht in the early '70s, a person got much more bang for the baht than today as everything was much, much cheaper back then.

It's all relative to what the cost of living is....If all prices in Thailand dropped 50%, effectively giving the buying power of 45 baht to the dollar, that excited nostalgia might return...it would for me. For me, 33 baht/dollar in the current day (a 10% increase) would make me feel comfortable with the exchange rate....but I won't be upset if it goes higher...a person can hope.

[EvilDrSomkid]

There are risks, such as the deepening debt crisis in the euro zone; Spain could be the next country to ask for support from the European Union and the International Monetary Fund.

Yesterday the news was the the bond auction of Spain and Italy went better than expected. Portugal's went better than expected as well.

Would this be a reason why the eur-thb jumped from 39.4 to 40.5 today?

And is this just a blip?

[Naam]

recover against other currencies, maybe. not against gold.

buy reading glasses!

[Naam]

US dollar 'expected to recover' this year

"recovery" has already started today. US dollar losing vs. virtually every currency and commodity.

[JimGant]

a person got much more bang for the baht than today as everything was much, much cheaper back then.

Right. As I recall, a 'long time' bang was only 'one red baht.' At least in NKP and Udorn.

[PlanetX]

Gotta love those jobless "recoveries" - I guess if you factor the US starting another war with Iran or NK then the economy will heat up again

[opac]

"Recovery" ? .... not a chance. The US is broke. Dead broke.

It's just the fact that we've got too much debt to pay back let alone the interest portion on each quarter. Fabricated GDP, CPI, and unemployment rate. It's just the matter of time when the world realize that we don't produce as much as we eat like we used to back in the 50's. And then it will come the time when the whole world doesn't want USD as world reserve currency anymore. The only thing that the US still hold its power and the Brand Name to argue around is the military power.... and oh well, maybe a microphone too.

[quandow]

. . . and tourism is going to rise 500%. Ah, the readers of crystal balls!

[waza]

I expect the UD$ to rise against the baht as it always does in low season, fall against the RMB, gold, silver, oil and AU$. As long as the US printing presses keep working overtime and the US edconomy is based on consumption.

[Englander]

Such an informative thread.

[Shurup]

riiiiight....

$1 CAD is 31 Baht already, But CAD to USD is miserable (not in USD favour). Yankees need to get their poo together, I am getting paid in the USD and I want getting $1.25 CAD for each USD as I was getting 2 years back.

After that is sorted, I will worry about the Baht value.

[Pib]

riiiiight....

$1 CAD is 31 Baht already, But CAD to USD is miserable (not in USD favour). Yankees need to get their poo together, I am getting paid in the USD and I want getting $1.25 CAD for each USD as I was getting 2 years back.

After that is sorted, I will worry about the Baht value.

Send a Canadian fighting force down to Washington, D.C. to straighten out those Yanks, but don't send the force through Chicago or Detroit as they will get robbed and shot.

[T_Dog]

30.30 USD Super Rich.

Yep. Nudging right up there against 40 again........

[mommysboy]

US dollar 'expected to recover' this year

"recovery" has already started today. US dollar losing vs. virtually every currency and commodity.

Yes in all honesty, the greenback is not in place to recover.

It'll do well to hold 28baht this year. Could go as low as 25baht.

[EvilDrSomkid]

Why is the USD and EUR going up against the Baht?

At this time: USD: 30.54 and the EUR: 41.23.

Just last week the EUR was hanging in the low 39, but now suddenly slowly climbing.

Is the BoT messing around 'cause I cannot believe its becuase the EUR is so strong.

Although, 1 EUR = USD1.35 today.

Naam, please school me

[thaimate]

Why is the USD and EUR going up against the Baht?

At this time: USD: 30.54 and the EUR: 41.23.

Just last week the EUR was hanging in the low 39, but now suddenly slowly climbing.

Is the BoT messing around 'cause I cannot believe its becuase the EUR is so strong.

Although, 1 EUR = USD1.35 today.

Naam, please school me

They were just talking about this on CNN and the consensus was that the Euro will go down soon and The Pound was a better bet as a safe haven rather than the Euro.

[Naam]

Why is the USD and EUR going up against the Baht?

At this time: USD: 30.54 and the EUR: 41.23.

Just last week the EUR was hanging in the low 39, but now suddenly slowly climbing.

Is the BoT messing around 'cause I cannot believe its becuase the EUR is so strong.

Although, 1 EUR = USD1.35 today.

Naam, please school me

there is nothing to school, only watching the facts. the €UR is appreciating since days vs. precious metals and virtually all currencies including the 'safe haven' Swiss Franc. this appreciation would have been much stronger if the EU clowns would talk less and act more.

[lannarebirth]

Why is the USD and EUR going up against the Baht?

At this time: USD: 30.54 and the EUR: 41.23.

Just last week the EUR was hanging in the low 39, but now suddenly slowly climbing.

Is the BoT messing around 'cause I cannot believe its becuase the EUR is so strong.

Although, 1 EUR = USD1.35 today.

Naam, please school me

there is nothing to school, only watching the facts. the €UR is appreciating since days vs. precious metals and virtually all currencies including the 'safe haven' Swiss Franc. this appreciation would have been much stronger if the EU clowns would talk less and act more.

What's really sad is that we even care what clowns do, but sadly we do. I understand all the <deleted> and theives being who they are, but what's become of us? I excuse myself by saying these a's and t's wage constant warfare against what i've saved and earned and i need to fight back as best i can. I suppose that's largely true, but what a sad fuc_king pastime that is.

Edited January 21, 2011 by lannarebirth

[12DrinkMore]

Why is the USD and EUR going up against the Baht?

At this time: USD: 30.54 and the EUR: 41.23.

Just last week the EUR was hanging in the low 39, but now suddenly slowly climbing.

Is the BoT messing around 'cause I cannot believe its becuase the EUR is so strong.

Although, 1 EUR = USD1.35 today.

Naam, please school me

I believe the EUR has appreciated because China and Japan (!) are making noises that they will buy a substantial amount of EUR debt.

http://www.businessweek.com/news/2011-01-11/japan-to-buy-euro-bonds-joins-china-to-avert-crisis.html

[Naam]

Why is the USD and EUR going up against the Baht?

At this time: USD: 30.54 and the EUR: 41.23.

Just last week the EUR was hanging in the low 39, but now suddenly slowly climbing.

Is the BoT messing around 'cause I cannot believe its becuase the EUR is so strong.

Although, 1 EUR = USD1.35 today.

Naam, please school me

there is nothing to school, only watching the facts. the €UR is appreciating since days vs. precious metals and virtually all currencies including the 'safe haven' Swiss Franc. this appreciation would have been much stronger if the EU clowns would talk less and act more.

What's really sad is that we even care what clowns do, but sadly we do. I understand all the <deleted> and theives being who they are, but what's become of us? I excuse myself by saying these a's and t's wage constant warfare against what i've saved and earned and i need to fight back as best i can. I suppose that's largely true, but what a sad fuc_king pastime that is.

you and me should form a club LRB the year is 21 days old and i see a negative performance in my spreadsheet. the amount is only tiny peanuts but that hasn't even happened in the midst of the 2008 crisis

Edited January 21, 2011 by Naam

[Naam]

I believe the EUR has appreciated because China and Japan (!) are making noises that they will buy a substantial amount of EUR debt.

the noise is bigger than the amounts talked about and the expression "substantial" is not warranted.

[EvilDrSomkid]

Well the reason I am asking is because I need to transfer a large amount of money (for me) to Thailand now. I need to do it this coming week.

The question is, should I do it on Monday or wait till Wednesday/Thursday just to squeeze the last bit out of it?

A few thousand baht is still money...

[Naam]

Well the reason I am asking is because I need to transfer a large amount of money (for me) to Thailand now. I need to do it this coming week.

The question is, should I do it on Monday or wait till Wednesday/Thursday just to squeeze the last bit out of it?

A few thousand baht is still money...

german finance minister Schaeuble made some remarks yesterday concerning the increase of the "european debt umbrella" which should have been positive for EURUSD on Globex... but was not.

transfer now or a few days later? your guess is as good as mine.