Us-Dollar / Thai Baht

[BookMan]

I will take up the challenge and play FOREX expert for 2 min.

The stronger Baht mirror a weaker Yen. Hence the Japanese trade deficit is making traders looking for alternative markets around the region.

Just my 2 bahts worth.

your 2 minutes are over

Nope, I still got 1 min left.

[ExpatOilWorker]

By "the last few days", you mean since January 17th, right? The baht has been getting stronger the past 5 weeks.

NB: We are talking baht Vs. good old US-$ here. If you are referring the baht Vs. the not so shining Sterling, then you will have to take it to the newly established grumpy British forum.

At the moment I'm interested in the HK$, which is tied to the US$. I was getting 4.10 baht to the HKD just two weeks ago, so the baht wasn't that strong then. But it's surged to 3.91 at the moment.

I would imagine the HK$ has a lot closer tie to the Redback than the Greenback.

[Naam]

By "the last few days", you mean since January 17th, right? The baht has been getting stronger the past 5 weeks.

NB: We are talking baht Vs. good old US-$ here. If you are referring the baht Vs. the not so shining Sterling, then you will have to take it to the newly established grumpy British forum.

At the moment I'm interested in the HK$, which is tied to the US$. I was getting 4.10 baht to the HKD just two weeks ago, so the baht wasn't that strong then. But it's surged to 3.91 at the moment.

I would imagine the HK$ has a lot closer tie to the Redback than the Greenback.

replace imagination with facts and you will find that since stone age (i exaggerate a wee bit) the Hong Kong Dollar is virtually glued to the US-Dollar and even in crisis times the deviation was not more than ±1%

[ExpatOilWorker]

By "the last few days", you mean since January 17th, right? The baht has been getting stronger the past 5 weeks.

NB: We are talking baht Vs. good old US-$ here. If you are referring the baht Vs. the not so shining Sterling, then you will have to take it to the newly established grumpy British forum.

At the moment I'm interested in the HK$, which is tied to the US$. I was getting 4.10 baht to the HKD just two weeks ago, so the baht wasn't that strong then. But it's surged to 3.91 at the moment.

I would imagine the HK$ has a lot closer tie to the Redback than the Greenback.

replace imagination with facts and you will find that since stone age (i exaggerate a wee bit) the Hong Kong Dollar is virtually glued to the US-Dollar and even in crisis times the deviation was not more than ±1%

Just checked and yes, little sweet HK-$ is in bed doing the naughty with big boy US-$. I must have exhausted my 2 min, see ya.

[Naam]

Yes it is but I think a lot of the problem is self made. We do not want a strong dollar because it means we have to pay the Chinese in a strong dollar vs a weak dollar.

you made my day BigRick! fortunately, whatever liquid i spit out because laughing out loudly is neither on the screen nor on the keyboard but on the floor.

p.s. are you a financial adviser?

Nope but I do watch and read the news enough to pay attention to what the Federal Reserve does to devalue the dollar so we are really paying less back. If you print 600 Billion dollars do you create 600 new billion dollars worth of positive net worth? No you dilute what you had with another 600 billion dollars lowering the amount you pay back because its value has been diluted. I think the best example of this was 2010 but here is an article anyway simple enough if you would like to research the concept >devaluing the US dollar vs debt< http://currentusanat...bt-2314511.html You think it is bad now wait until they raise the minimum wage in Thailand everything will go up along with the wages to adjust the extra spending power. Long story short about debt you owe the bank 200k they own you, You owe the bank 200 billion you own them.

what you are talking about is called "monetising" debt by inflation. but until now none of the FED's action has caused any inflation because the alleged "printed" money is mainly book money which did not and will not flow into the economy where inflation can be generated which usually (but not always) weakens a currency.

the U.S. had rampant inflation end of the 70s / early 80s but that caused high interest rates and the result was a Dollar strength which was stronger than during any period of the last 45 years. but whatever... "paying back the Chinese with a weak Dollar" is an irrelevant assumption.

[el jefe]

If Americans went back to saving instead of spending everything, not only would many of the problems be solved, but Mom could stay home if she wanted to.

How does that cure all the Military Industrial Complex spending? Or pork Barrel for that matter

If the US spent the same proportion of GDP on military spending this year as it did 50 or 100 years ago (go look that number up) and all special earmarks were eliminated from govt spending, do you really think the US will eliminate the deficit? You think those are the causes of the huge deficit???

And since I was only replying to the part I quoted:

"Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world.

We had absolutely no national debt, had the largest middle class in the world, and Mom , if agreed, stayed home to raise the kids.

What in the heck happened? Can you spell 'politicians?' "

please tell us how a small reduction in military spending and the elimination of special earmarks will significantly increase the middle class (btw, it's still "the largest middle class in the world" by just about every measurement) and allow Mom to stay home.

Edited February 24, 2012 by el jefe

[flying]

If Americans went back to saving instead of spending everything, not only would many of the problems be solved, but Mom could stay home if she wanted to.

How does that cure all the Military Industrial Complex spending? Or pork Barrel for that matter

If the US spent the same proportion of GDP on military spending this year as it did 50 or 100 years ago (go look that number up) and all special earmarks were eliminated from govt spending, do you really think the US will eliminate the deficit? You think those are the causes of the huge deficit???

please tell us how a small reduction in military spending and the elimination of special earmarks will significantly increase the middle class (btw, it's still "the largest middle class in the world" by just about every measurement) and allow Mom to stay home.

I see......I had thought by your original statement that you were only referring to citizens & not government when you said Americans...

That is good & I agree of course the spending is crazy when it comes to the Military industrial Complex & it is not like we were not warned even as recently as 1961 in Eisenhower's farewell speech.

As for percentage of GDP.....I never like to mention GDP as a gauge of anything.....Anymore than the CPI

No I do not think Military Industrial Complex or Pork Barrel is 100% responsible for the National Debt but it has a big slice....Do I think it will significantly increase the middle class or cure it all to stop it? Well it is a start which is better than the constant digging deeper or kicking the can further.....But that would be getting off topic & may as well go in the Financial Crisis thread.

Edited February 24, 2012 by flying

[ralphlsasser]

Isn't it strange that during the month, the baht goes down to the dollar. Then, about a week before Social Security retirement checks come in and the baht goes up. It does that every month.

[Naam]

Isn't it strange that during the month, the baht goes down to the dollar. Then, about a week before Social Security retirement checks come in and the baht goes up. It does that every month.

what the USD does every month is for those who's income is in Dollars rather irrelevant. that applies especially to those who's main source of income are Social Security or any other fixed payments which neither matched the Dollar's depreciation nor the inflation rate in Thailand. needless to mention is that SS payments don't move the Baht a single Satang because they are a drop in the ocean of USD THB forex dealings.

back to what Dollar fixed income recipients consider important. they look at the graph below and grind their teeth seeing the dollar falling from 42.50 to 30.35 in less than six years, id est loosing >25% of their income and another (most probably) 15-20% caused by Thai inflation.

[fire and ice]

It's also terrible that the AUD has come down slightly against its all-time-historical record-high against the baht.

A couple of weeks ago it got to about 33.4 (an all time high) But now its down to about 32.5

...oops! didn't mean to rub it in...

...actually yes I did!!

[spidermike007]

From what I have been able to determine, much of the power of the baht comes from offshore currency flows. Right now the SET is at 1146! That means billions of dollars coming into the stock market, and it drives up the value of the baht. That seems to be the single largest determining factor, though other accounts are factored into the equation. Not sure why the SET is so high, but there appears to be a lot of foreign speculation on it.

[ExpatOilWorker]

Isn't it strange that during the month, the baht goes down to the dollar. Then, about a week before Social Security retirement checks come in and the baht goes up. It does that every month.

what the USD does every month is for those who's income is in Dollars rather irrelevant. that applies especially to those who's main source of income are Social Security or any other fixed payments which neither matched the Dollar's depreciation nor the inflation rate in Thailand. needless to mention is that SS payments don't move the Baht a single Satang because they are a drop in the ocean of USD THB forex dealings.

back to what Dollar fixed income recipients consider important. they look at the graph below and grind their teeth seeing the dollar falling from 42.50 to 30.35 in less than six years, id est loosing >25% of their income and another (most probably) 15-20% caused by Thai inflation.

When looking at the baht strengthening over the past 5 years, we tend to think "capital inflow", but what about the other part of the equation, "capital outflow" or rather the lack of capital outflow?

Thai Airways haven't bought 17 new Jumbo Jets in a long time, other than a few Dragon jet fighters that was paid a long time ago the military haven't bought a new aircraft carrier and the revolving doors in the parlament prevented the government from starting any new Mega Project that require foreign equipment and an army of $2000/day Siemens engineers.

[Naam]

From what I have been able to determine, much of the power of the baht comes from offshore currency flows. Right now the SET is at 1146! That means billions of dollars coming into the stock market, and it drives up the value of the baht. That seems to be the single largest determining factor, though other accounts are factored into the equation. Not sure why the SET is so high, but there appears to be a lot of foreign speculation on it.

most foreign investment in shares quoted on the SET is done by buying offshore (HK, SIN, LON) ADRs and GDRs of Thai shares which are quoted and settled in foreign currency, driving share prices, but without any actual forex flow into Thailand or forex/THB trading involved. of course there's a lot of speculation, not only foreign but also domestic.

after all the SET has to rise another 53% to reach its all time high of 1,754 nineteen years ago.

[qdinthailand]

Accounts Receivable Tax

Building Permit Tax

CDL license Tax

Cigarette Tax

Corporate Income Tax

Dog License Tax

Excise Taxes

Federal Income Tax

Federal Unemployment Tax (FUTA)

Fishing License Tax

Food License Tax

Fuel Permit Tax

Gasoline Tax (currently 44.75 cents per gallon)

Gross Receipts Tax

Hunting License Tax

Inheritance Tax

Inventory Tax

IRS Interest Charges IRS Penalties (tax on top of tax)

Liquor Tax

Luxury Taxes

Marriage License Tax

Medicare Tax

Personal Property Tax

Property Tax

Real Estate Tax

Service Charge Tax

Social Security Tax

Road Usage Tax

Recreational Vehicle Tax

Sales Tax

School Tax

State Income Tax

State Unemployment Tax (SUTA)

Telephone Federal Excise Tax

Telephone Federal Universal Service Fee Tax

Telephone Federal, State and Local Surcharge Taxes

Telephone Minimum Usage Surcharge Tax

Telephone Recurring and Nonrecurring Charges Tax

Telephone State and Local Tax

Telephone Usage Charge Tax

Utility Taxes

Vehicle License Registration Tax

Vehicle Sales Tax

Watercraft Registration Tax

Well Permit Tax

Workers Compensation Tax

STILL THINK THIS IS FUNNY?

Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world.

We had absolutely no national debt, had the largest middle class in the world, and Mom , if agreed, stayed home to raise the kids.

This would make more sense if it showed which taxes were federal, which were state, and which were city/local taxes. Everything is rolled into one, in a rant against the U.S. federal government.

When you complain about taxes, it implies you 'get nothing' in return - which is utter nonsense. I don't agree with all the taxes - especially the ones I have to pay, for what we call Defense, but which is really War purposes, but somehow you have to pay for stuff. Like roads and bridges, garbage pickup, snow removal, your border security and police, fire, them FBI, CIA, NSA and all them other government spies you like so much keeping you safe and secure (not!) and all the other crap you forget you get when you pay your taxes. Sure, a lot don't make sense, but when you stop and add up all YOU get, and everyone else adds up what THEY get, then you realize you got to pay for it.

I don't want to pay for the crap they call Homeland Security - and Defense. I'd much rather have it come back to me as Health Care - as Education - as Science Research - as Benefits in my old age since I paid into the program.

But as you say, the Politicians have other ideas on how to spend it. Mainly, ideas from the corporate lobbyists who promise 'fabulous prizes and gifts' in return for spending it the way corporate clients and the fabulously wealthy want to see it spent.

Taxes are only 'too much' when you get 'too little' back. In my mind, when we 'blow it up', that's a shame and a waste.

[Naam]

When looking at the baht strengthening over the past 5 years, we tend to think "capital inflow", but what about the other part of the equation, "capital outflow" or rather the lack of capital outflow?

Thai Airways haven't bought 17 new Jumbo Jets in a long time, other than a few Dragon jet fighters that was paid a long time ago the military haven't bought a new aircraft carrier and the revolving doors in the parlament prevented the government from starting any new Mega Project that require foreign equipment and an army of $2000/day Siemens engineers.

i'm not familiar with capital outflows but the increase of Thailand's foreign exchange reserves by nearly USD 20 billion annually for the last five years speaks volumes. not a single Satang of the present ~$175 billion is FDI or SET related. this increase is based solely on the balance exports/imports and the BOT manipulating the exchange rate in order not to let the Baht appreciate even faster.

Edited February 26, 2012 by Naam

[ExpatOilWorker]

When looking at the baht strengthening over the past 5 years, we tend to think "capital inflow", but what about the other part of the equation, "capital outflow" or rather the lack of capital outflow?

Thai Airways haven't bought 17 new Jumbo Jets in a long time, other than a few Dragon jet fighters that was paid a long time ago the military haven't bought a new aircraft carrier and the revolving doors in the parlament prevented the government from starting any new Mega Project that require foreign equipment and an army of $2000/day Siemens engineers.

i'm not familiar with capital outflows but the increase of Thailand's foreign exchange reserves by nearly USD 20 billion annually for the last five years speaks volumes. not a single Satang of the present ~$175 billion is FDI or SET related. this increase is based solely on the balance exports/imports and the BOT manipulating the exchange rate in order not to let the Baht appreciate even faster.

Ehmmm, or BOT not manipulating the exchange rate in order to let the baht appreciate naturally!

We must admit, Thailand have had a very healthy trade balance for the past, well 10 years really.

[richard10365]

Uggg...I hate the subject of international finance. I am failing this class at Payap. However, according to the book I am studying about it, there are 5 factors that influence exchange rates.

1. The change in the differential between U.S. inflation and the foreign country's inflation
   
2. The change in the differential between the U.S. interest rate and the foreign country's interest rate
   
3. The change in the differential between the U.S. income level and the foreign country's income level
   
4. The change in government controls: FX barriers, trade barriers, intervening (buying and selling currency)
   
5. The change in expectiations of future exchange rates
   

I wish I was better at this. Most classes with numbers gives me problems. Anyway, one or more of the above factors happening at the same time can influence the spot rate it go up or down. So if you think about the situations in the U.S. and Thailand, add in these factors, and it might help explain the current exchange rate.

Now I need to go back to my studies and figure out how to do triangular arbitrage before my final exam on Thursday. I'm probably going to have to take this class again in the next school year.

Edited February 28, 2012 by richard10365

[Naam]

When looking at the baht strengthening over the past 5 years, we tend to think "capital inflow", but what about the other part of the equation, "capital outflow" or rather the lack of capital outflow?

Thai Airways haven't bought 17 new Jumbo Jets in a long time, other than a few Dragon jet fighters that was paid a long time ago the military haven't bought a new aircraft carrier and the revolving doors in the parlament prevented the government from starting any new Mega Project that require foreign equipment and an army of $2000/day Siemens engineers.

i'm not familiar with capital outflows but the increase of Thailand's foreign exchange reserves by nearly USD 20 billion annually for the last five years speaks volumes. not a single Satang of the present ~$175 billion is FDI or SET related. this increase is based solely on the balance exports/imports and the BOT manipulating the exchange rate in order not to let the Baht appreciate even faster.

Ehmmm, or BOT not manipulating the exchange rate in order to let the baht appreciate naturally!

We must admit, Thailand have had a very healthy trade balance for the past, well 10 years really.

BoT's reserves hardly moved the first half of the last decade. the big move started in 2008, id est increase impossible based on trade balance only.

by the way, there is hard evidence that the BoT is intervening more or less every daily. one just have to look at the daily fluctuations in context with Thai office times and public holidays.

[Naam]

add in these factors, and it might help explain the current exchange rate

good luck with your studies. once you pass the exam forget most what clever books and eggheads taught you. look at the facts, draw your own conclusions and then discard them. start again by using scientific methods to forecast exchange rates. one of the best is:

Edited February 28, 2012 by Naam

[richard10365]

add in these factors, and it might help explain the current exchange rate

good luck with your studies. once you pass the exam forget most what clever books and eggheads taught you. look at the facts, draw your own conclusions and then discard them. start again by using scientific methods to forecast exchange rates. one of the best is:

Thanks Naam...I'll keep that in mind.

[fletchsmile]

Some of the factors in my view:

The longer term trend is for Asian currencies to strengthen and USD to weaken as the balance of economic power shifts from West to East.

But: At the end of 2011, the world was pretty much in "risk off mode" with people moving into USD and its perception as a safe haven in times of crisis. In addition the floods in Thailand accentuated THB weakness and worries over economy. Hence THB weakened from around 30 in August to 31.7 in Dec.

In 2012 markets are more in "risk on mode", and seem to be looking beyond Greece and the Euro issues more. Equity markets have rallied significantly as an example of risk on. Money has therefore moved away from USD to other trades. For Thailand specific examples, the floods are now over, plus a net value of THB 45bio+ has come from foreign buyers in Thai equities - mainly in Feb. The SET is up nice double digit %s in 2012. Net buying of Thai equities by foreign investors moving money into the country has helped strengthen THB. In addition to Thai equities, foreign investors have also shown strong interest in Thai bonds and are net buyers of Thai bonds.

[Naam]

In addition to Thai equities, foreign investors have also shown strong interest in Thai bonds and are net buyers of Thai bonds.

are all restrictions lifted now Fletch?

[inthepink]

When looking at the baht strengthening over the past 5 years, we tend to think "capital inflow", but what about the other part of the equation, "capital outflow" or rather the lack of capital outflow?

Thai Airways haven't bought 17 new Jumbo Jets in a long time, other than a few Dragon jet fighters that was paid a long time ago the military haven't bought a new aircraft carrier and the revolving doors in the parlament prevented the government from starting any new Mega Project that require foreign equipment and an army of $2000/day Siemens engineers.

i'm not familiar with capital outflows but the increase of Thailand's foreign exchange reserves by nearly USD 20 billion annually for the last five years speaks volumes. not a single Satang of the present ~$175 billion is FDI or SET related. this increase is based solely on the balance exports/imports and the BOT manipulating the exchange rate in order not to let the Baht appreciate even faster.

Ehmmm, or BOT not manipulating the exchange rate in order to let the baht appreciate naturally!

We must admit, Thailand have had a very healthy trade balance for the past, well 10 years really.

BoT's reserves hardly moved the first half of the last decade. the big move started in 2008, id est increase impossible based on trade balance only.

by the way, there is hard evidence that the BoT is intervening more or less every daily. one just have to look at the daily fluctuations in context with Thai office times and public holidays.

They regularly announce the fact they are conducting open market operations, as is common practice among central banks around the world - there's no need to look for "hard evidence".

As for BigRick's comment that speculators are to blame for all the world's ills, this kind of nonsense is regularly spouted by people with no understanding of finance. Without the participation of speculators the market would be far less liquid, making it harder for people and companies to exchange currencies, for companies to raise money with stock market flotations and for developing countries to take advantage of global markets.