Baht Strengthens Significantly On Foreign Capital

[george]

Baht strengthens significantly on foreign capital inflow

BANGKOK: -- The baht has considerably strengthened in the same direction with other regional currencies, particularly Japanese yen, boosted by an inflow of foreign capital, according to the Bank of Thailand.

Bandit Nigathavorn, Deputy Governor of BOT, said the baht had appreciated since early this year because other regional currencies, especially the yen, had strengthened significantly.

As well, the appreciation stemmed from the foreign capital inflow into the Stock Exchange of Thailand directly.

He said the central bank would supervise the baht movement to ensure the local currency is neither too volatile nor strong.

He warned investors to be cautious about investing in the stock market, saying he was uncertain whether the foreign capital had flown in the country in a short run.

He said BOT would monitor the baht movement on a daily and monthly basis.

He conceded the central bank could not determine at which level the baht should stay. However, the local currency had strengthened less significantly than other regional currencies.

SET’s President Kittirat Na Ranong said the strengthening of the baht showed the country had enjoyed a steady economic growth.

He believed the baht would continue to appreciate in the long run. Under the scenario, there might be complaints by some exporters that prices of export products are higher.

The baht on Monday closed at 39.78 to the US dollar, up 0.73 per cent from last Friday. The Japanese yen, South Korean won, Indonesian rupiah, and Singapore dollar strengthened by 1.77, 1.06, 1.16, and 0.75 per cent respectively.

--TNA 2006-01-10

[george]

Baht continues to strengthen

BANGKOK: -- A US dollar will get only 39.39 baht at the currency exchange windows at Bangkok Bank this morning. The overnight rate in New York raised the suddenly strong baht to 39.675 to buy a dollar.

Official Thai News Agency quotes the Bank of Thailand this morning that the baht has "considerably strengthened" but seems to be following other regional currencies, particularly Japanese yen, and is boosted by an inflow of foreign capital.

Bandid Nijathaworn, BOT's Deputy Governor, said on Monday that the Thai currency had appreciated since early this year because other regional currencies, especially the yen, had strengthened significantly.

As well, the appreciation has stemmed from the foreign capital inflow into the Stock Exchange of Thailand (SET) directly.

He said the central bank would supervise the baht movements to ensure that the local currency is neither too volatile nor strong. He warned investors to be cautious about investing in the Thai stock market, saying he was uncertain whether the foreign capital had flown in the country in a short run.

SET President Kittirat Na Ranong said the strengthening of the Thai baht showed that the country had enjoyed a steady economic growth.

He believed the baht would continue to appreciate in the long run.

Under the scenario, there might be complaints by some exporters that prices of their export products are higher, he said.

The baht on Monday had closed at 39.78 to the US dollar, up 0.73 per cent from last Friday.

The Japanese yen, South Korean won, Indonesian rupiah, and Singapore dollar strengthened by 1.77, 1.06, 1.16, and 0.75 per cent respectively.

--Bangkok Post 2006-10-10

[Nam Kao]

US markets set to dive, lets see if i am good

Edited January 10, 2006 by Nam Kao

[Jimmy2004]

I believe this might, in part, be due to the selling of Shin Corp to SingTel by Thaksin (which is a widely believed rumour) but I'm no expert.

[dr_Pat_Pong]

Would Toxin be good for a loan right now ?

[Larryst]

US markets set to dive, lets see if i am good

Is that your prediction or do you have any reliable sources for the U.S. market to dive?

[Nam Kao]

Larry , yes, i shorted the close, but who knows, i am following ewavebrainfood.com , he is right so

much it scares me

[slim]

I believe this might, in part, be due to the selling of Shin Corp to SingTel by Thaksin (which is a widely believed rumour) but I'm no expert.

er.......no.

The dollar is weak against all the major trading companies especially the Yen which has a knock on strengthening effect on all the Asian currencies.

Unfortunately this also strengthens the Baht against the Pound which is trading at a 2 year low of 70.43 (previous low was 69.78 on 20th Jan 2004). This is against a high of 76.192 on 21st December 2004.

Further dollar declines look likely which is bad news for ex-pats with money in UK or US banks.

[Nam Kao]

ok last 10 days his daily calls have been 95% correct

i have just been scalping 7,000 shrs QQQQ

from June 1st to now he made 50% just trading qqqq

Edited January 10, 2006 by Nam Kao

[Losangels]

Another factor is the Chinese currency Yuan is expected to be stronger this year. The Chinese government just has allowed their currency to be traded locally between interbank allowing Yuan to move according to the market force rather than just have the government intervention to to keep the currency weak than it should be. I also like to add that the Ferderal Reserve of the US is

not expected to raise the interest rate further after having raising it continiously for the 12th or 13th times this past year.

[Nam Kao]

I think/hear they keep raising

[Nam Kao]

Normally a 335 in the micro degree is not a cause for alarm and often is a false sell signal, however when you see the formation with %K on the STO at or close to 100 it tells you that the current wave has ended and you are likely to move to the next higher degree of trend but in the other direction, in this case meaning down

[TRD LOVER]

He believed the baht would continue to appreciate in the long run. Under the scenario, there might be complaints by some exporters that prices of export products are higher.

The baht on Monday closed at 39.78 to the US dollar, up 0.73 per cent from last Friday.

Does this mean we all go running to the bank to cash out?? ouch tourism will suffer now..

[sabaijai]

I believe this might, in part, be due to the selling of Shin Corp to SingTel by Thaksin (which is a widely believed rumour) but I'm no expert.

Widely believed enough to appear on the front page of Matichon Weekly.

[eljeque]

The Dollar has become weaker this past week or more against most every currency. The Baht is not on a run against the dollar; the dollar is on a slide against Asian currencies.

It could have to do with all of the talk against another rate increase in the US, or only one more rate increase, or it could have to do with the rest of the world no longer wanting to fund the giant US trade and budget deficits, or or or or, or something entirely different.

It would not be prudent to start cashing out all of one's dollars or pounds to invest in Baht or Baht denominated securites right now because of the past week, but it is equally difficult to see how the dollar can remain where it is with all of the financial difficulties that the government is having.

[ozzieman05]

IS THE GLASS HALF EMPTY OF HALF FULL

Seems to me that Thailand is taking credit for nothing they deserve

The Australia dollar is at a great exchange rate with the Chinese Yen, and still on track with Thai currency

yet we can buy US dollars cheap at the moment

So I a transferring my US monies to Australian right now

a nice little profit

So I think the glass is half empy

[westcoastnative]

If this trend continues my dreams of retiring in Thailand, sipping Mai Tais on the beach and chasing young Thai girls may all go up in smoke.

[eljeque]

http://finance.yahoo.com/currency/convert?...=AUD&amt=1&t=5y

Look at the above 5-year chart on the Aussie dollar. The A$ has done well against the US$ for five years as has most evey other currency, but the A$ has done especially well because of the natural resources that it exports. Natural Resources have been on a run for five years, and the A$ has been fortunate to receive the benefit of this. I am NO PROFESSIONAL, and the short-term prospects on the A$ versus the US$ might be in your favor, but a year or more from now, if the world economy does slow (especially India and China) and the resulting decrease in demand for these resources appears to be significant, the A$ could see a strong reversal. On the 5-year chart, it appears that the dollar may have found its bottom point and it might be turning up, so it might be worthwhile to look at some other strong currencies besides the A$. It is always worthwhile to diversify.

*********

Dollar Advances on Optimism U.S. Will Preserve Rate Advantage

Jan. 10 (Bloomberg) -- The dollar rose for a second day in Asia on speculation the U.S. will preserve its interest-rate advantage over Europe and Japan as America's economy outperforms.

Interest futures show the Federal Reserve is expected to raise its target rate this month, while the European Central Bank will keep its benchmark rate unchanged when it meets Jan. 12, according to economists in a Bloomberg survey. The dollar last week had the biggest slump in more than three years after traders bet the Fed had nearly finished raising borrowing costs.

``The markets are staring to short change the Fed and call a premature end to the hiking cycle,'' said Craig Ferguson, a currency strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``The Fed are still well and truly in the game, and accordingly, it's imprudent to fight the Fed by selling dollars here.''

The dollar rose to $1.2060 per euro at 12:35 p.m. in Tokyo, from $1.2088 in New York late yesterday, according to data compiled by Bloomberg. It also rose to 114.66 yen from 114.48. The dollar yesterday gained the most in almost three weeks versus the euro after a technical indicator approached a level that signaled the currency's recent rally would stall.

The Fed has boosted its rate 13 straight times since June 2004, to 4.25 percent. The ECB lifted its benchmark rate in December for the first time in five years, to 2.25 percent. The Bank of Japan pushed interest rates to zero percent in March 2001.

Yields on interest-rate futures show traders are pricing in a 96 percent chance the central bank will raise the federal funds rate to 4.5 percent at its meeting Jan. 31. They are also pricing in a 54 percent chance of an increase to 4.75 percent at the subsequent meeting March 28.

Prevailing Sentiment

Losses in the euro may be limited by speculation an economic report will show investor confidence in Germany, Europe's biggest economy, rose to the highest in almost two years.

The ZEW Center for European Economic Research's gauge of institutional and analyst expectations increased to 65 from 61.6 in December, according to the median of 34 estimates in a Bloomberg survey. The institute is scheduled to release the report at 11 a.m. in Mannheim.

``Amid the prevailing dollar-bearish sentiment, strong data in Germany could surely push up the euro again,'' said Takehiko Jimbo, a currency manager at Mitsubishi UFJ Trust & Banking Co., a unit of the world's biggest lender by assets. ``Should the index rise more than expected, it will certainly raise expectations for ECB rate hikes.''

Policy makers meet on Jan. 12 and all 44 economists surveyed by Bloomberg say they will leave rates unchanged.

Strong Data

A U.S. Commerce Department report Jan. 13 may show retail sales increased 1 percent last month, the most since July, according to the median estimate in a Bloomberg News survey. Prices paid by factories, farmers and other producers rose 0.4 percent in December, after dropping 0.7 percent the previous month when crude oil prices slumped, according to the median forecast before a Labor Department report Jan. 13.

``Strong U.S. economic data such as retail sales and PPI figures could still push up the dollar'' to 125 yen by March 31, said Tohru Sasaki, a currency strategist in Tokyo at JPMorgan Chase & Co., and a former Bank of Japan chief currency trader.

Guynn's Comments

Atlanta Fed President Jack Guynn suggested the central bank is concerned about faster inflation.

``Some of the potential pressures on inflation are still there,'' said Guynn, 63, who becomes a voting member this year on the Fed's rate-setting Open Market Committee. ``I'm still very much attuned to potential inflationary pressures that I think are still at work in the economy.''

He spoke to reporters yesterday after a speech to the Rotary Club of Atlanta.

``Guynn suggested there is still some room for the Fed to head for further rate hikes,'' said Gen Kawabe, a foreign- exchange manager in Tokyo at Chuo Mitsui Trust and Banking Co. Ltd. ``The Fed will keep raising rates, should economic indicators be strong, boosting the dollar.''

The yen fell after Japanese Finance Minister Sadakazu Tanigaki yesterday said he needs to monitor the currency ``carefully'' following a rally to a three-month high. In an interview in New York yesterday, Tanigaki described the yen's rise as a ``sudden fluctuation.'' The yen gained 2.9 percent against the dollar last week.

Economic and Fiscal Policy Minister Kaoru Yosano today in Tokyo said sharp moves in the currency are ``undesirable'' and currencies should reflect economic fundamentals.

The government ``is worried if the strength of the yen is too much,'' said Mike Moran, an economist in Hong Kong at Standard Chartered Bank. ``The Japanese haven't come in yet'' to weaken the yen but it's a concern that can affect the currency.

Japan curbed its currency's gains two years ago by selling a record amount of yen in the financial year ended March 2004.

To contact the reporter on this story:

Kosuke Goto in Tokyo at [email protected];

Chris Cooper in Tokyo at [email protected]

Last Updated: January 9, 2006 22:38 EST

[PeaceBlondie]

Hmmm....maybe I should get a job denominated in baht....or stop paying so much for entertainment.

[massein]

The Dollar has become weaker this past week or more against most every currency. The Baht is not on a run against the dollar; the dollar is on a slide against Asian currencies.

It could have to do with all of the talk against another rate increase in the US, or only one more rate increase, or it could have to do with the rest of the world no longer wanting to fund the giant US trade and budget deficits, or or or or, or something entirely different.

It would not be prudent to start cashing out all of one's dollars or pounds to invest in Baht or Baht denominated securites right now because of the past week, but it is equally difficult to see how the dollar can remain where it is with all of the financial difficulties that the government is having.

Correct me if i'm wrong, this seem to be part of a yearly trend. I recall the same margin about 1 year ago. but if i'm wrong, the good life will soom be over for this humble retiree

[massein]

The Dollar has become weaker this past week or more against most every currency. The Baht is not on a run against the dollar; the dollar is on a slide against Asian currencies.

It could have to do with all of the talk against another rate increase in the US, or only one more rate increase, or it could have to do with the rest of the world no longer wanting to fund the giant US trade and budget deficits, or or or or, or something entirely different.

It would not be prudent to start cashing out all of one's dollars or pounds to invest in Baht or Baht denominated securites right now because of the past week, but it is equally difficult to see how the dollar can remain where it is with all of the financial difficulties that the government is having.

Correct me if i wrong, but i recall been at the same place and same time as last year, the sky way falling, and i was worried if i could continue my wonerful life still as an expat retiree.

[gharknes]

buy gold stocks, i did 6 months ago and i'm currently up 40%

[Darkling]

The Dollar has become weaker this past week or more against most every currency. The Baht is not on a run against the dollar; the dollar is on a slide against Asian currencies.

It could have to do with all of the talk against another rate increase in the US, or only one more rate increase, or it could have to do with the rest of the world no longer wanting to fund the giant US trade and budget deficits, or or or or, or something entirely different.

It would not be prudent to start cashing out all of one's dollars or pounds to invest in Baht or Baht denominated securites right now because of the past week, but it is equally difficult to see how the dollar can remain where it is with all of the financial difficulties that the government is having.

Correct me if i'm wrong, this seem to be part of a yearly trend. I recall the same margin about 1 year ago. but if i'm wrong, the good life will soom be over for this humble retiree

Humble retiree. Only Taksin has more money than you in Thailand. Well Now that he has that window cleaning job on the side

[Foggy Bottom]

I believe this might, in part, be due to the selling of Shin Corp to SingTel by Thaksin (which is a widely believed rumour) but I'm no expert.

er.......no.

The dollar is weak against all the major trading companies especially the Yen which has a knock on strengthening effect on all the Asian currencies.

Unfortunately this also strengthens the Baht against the Pound which is trading at a 2 year low of 70.43 (previous low was 69.78 on 20th Jan 2004). This is against a high of 76.192 on 21st December 2004.

Further dollar declines look likely which is bad news for ex-pats with money in UK or US banks.

Just checked online banking for the ATM rate - the last week withdrawls have been exchanging at B 68.75 average to the Pound

..... this is going to hurt those supplementing income by using eBay etc - it's a hefty 4-5% increase for postal charges and minimum selling prices when selling overseas, compared to a month ago.

OUCH!!

[bander]

US markets set to dive, lets see if i am good

What about the thai market?

Any reason to worry?

[pkrv]

For my money this is mostly to do with US debt and the Chinese stating they are no longer going to buy as much of it. The Chinese will diversify into other currencies and I guess other Asian countries will follow this lead.

We will see more angry comments from the US as this news hits home, after all if no one else if paying for US debt they may have to do it themselves

[Jai Dee]

BOT WARNS INVESTORS AGAINST CURRENCY SPECULATION AS THAI BAHT IS STRENGTHENING

The Bank of Thailand has warned investors against currency speculation as the baht is strengthening, while saying that it will monitor the change in currency closely.

Deputy BOT governor on currency stability, Bandit Nijtaworn (บัณฑิต นิจถาวร) said that the Baht has strengthened since the beginning of this year, because other currencies, especially the Yen, have also strengthened. He added that there are also inflows of funds in the capital market. Mr. Bandit said that the BOT has monitored the flows closely, to make sure that the fluctuation is not too great. He insisted that the Baht will still be allowed to change according to market mechanisms.

However, he said that investors speculating the currency at the moment should be more careful, as the capital inflows could be short-term ones. He said that the appropriate value of the Baht cannot be determined.

Source: Thai National News Bureau Public Relations Department - 10 January 2006

[Jai Dee]

BOT INDICATED THAT RECENT STREGTHENING OF THE BAHT WAS SUPPORT BY THE YEN AND INCREASED FLOW OF FOREIGN CAPITAL INTO THAILAND

The Bank of Thailand (BOT) has indicated that yesterday's strengthening of the baht was supported by the yen, coupled with the increased flow of capital into Thailand.

Deputy Governor of the BOT Bandit Nijthaworn (บัณฑิต นิจถาวร) said that Asian currencies, especially the Yen, have strengthened significantly. This factor coupled with the flow of foreign capital into Thailand, especially direct investments made in the stock exchange, have pushed up the baht's strength since the beginning of the year. However, the BOT would, in accordance to the market condition, prevent the baht from becoming too strong or fluctuate too greatly.

The central bank has also warned investors to take caution in their investments as it was not confident if the capital inflow that recently came into Thailand would be short-term. The day to day and weekly movements of the baht's exchange rate would be continually monitored by the BOT.

Yesterday, the Thai baht ended at 39.775 baht per 1 US dollar, which is a 0.73% appreciation compared to Friday's rate, while the Japanese yen appreciated by as much as 1.77%.

Source: Thai National News Bureau Public Relations Department - 10 January 2006

[Anon999]

For my money this is mostly to do with US debt and the Chinese stating they are no longer going to buy as much of it. The Chinese will diversify into other currencies and I guess other Asian countries will follow this lead.

We will see more angry comments from the US as this news hits home, after all if no one else if paying for US debt they may have to do it themselves

Exactly, and with the Chinese economy growing in the region of 9-10% per annum the Yuan may become the dominent currency in the long term. The Chinese are now trying to buy into the Nigerian oil business after poliitcs prevented them from buying a US oil company. Their consumption of oil, metals and other raw materials is escalating at a phenomemal rate.

With supply and demand controlling market prices what effect the Chinese economy is going to have on world-wide prices is causing a lot of concern. That will undoubtedly affect exchange rates.

Edited January 10, 2006 by Anon999

[george]

DPM downplays concern on sharp depreciation of baht

BANGKOK: -- Deputy Prime Minister and Commerce Minister Somkid Jatusripitak on Tuesday shrugged off concern on a recent sharp appreciation of the Thai baht, saying it would not affect the country’s exports.

He attributed the strengthening of the Thai currency to 39.775 to the US dollar on Monday to the foreign capital inflow into the Stock Exchange of Thailand (SET).

It could be witnessed by the rally of the SET index by 14.92 points in a single trading day, he pointed out.

He said the Bank of Thailand (BOT) was closing supervising the baht movement.

As well, the Commerce Ministry has already prepared a plan to stimulate the country's exports on a continual basis.

He added that the baht had strengthened since last year.

However, the current level is not too high and should not be worrying.

Phatraradee Shinkulkitniwat, a dealer of KASIKORNBANK (KBANK), said the baht had weakened after appreciating to 39.71 to the dollar Tuesday morning, the strongest in eight months, since investors began to buy back the dollar and take profits on the Thai baht.

The Thai currency hovered around 39.86-39.88 to the dollar in Tuesday morning trading session with the resistance and support levels at 39.80 and 39.95.

Key factors that should be monitored include a trade balance to be announced by the United States this week and results of meetings of central banks of the United Kingdom and Europe.

--TNA 2006-01-10