GBP to THB Exchange Rate

[15Peter20]

Does anyone know what's going on with this at the moment?

Two weeks ago I put a lump of GBP in a foreign currency account (Bangkok Bank) and was about to change it to THB but thought I'd track the THB exchange rate to see how it was going to go. I hadn't been tracking it at all before and know little about these things.

The exchange rate (TT) has gone down by 2 baht in as many weeks from 49.4 to 47.4. It seems that in the context of the stability of the past 2 years this is quite a dip. Anyone know why its happenning?

I can hold on to the GBP for a while but the sooner I can get a decent rate the better - the interest it's earning in the foreign currency account is a shade above zero. Does anyone have any confidence in the exchange rate recovering to around 49 anytime soon?

Cheers

Edited January 16, 2013 by 15Peter20

[CMTourist]

The rumour in the market is that Bank of Thailand has indicated its prepared to let the Baht strengthen without intervening and since the economy is strong, the Baht is strengthening

[wordchild]

also your (49.4) starting point for sterling maybe a little inflated. the pound was strong against the dollar over the immediate post new year period (a bit of a return to favour of risk assets) so it also saw a mini spike against the baht at the same time. this did not last long (2 days) and the pound has more or less gone back to where it was before xmass agst the dollar also a little bit worse than it was agst the bt. The bt has also been strong agst the dollar over the last few days maybe for the reasons cited above.

FWIW (IMO) sterling maybe a little bit cheap here against the dollar (and so prob also the bt) and medium term i would think there is a chance it will trend better. but week to week who knows.

Edited January 16, 2013 by wordchild

[ripstanley]

The Thai Baht has become stronger against all currencies. Have a look what the US dollar is. It is below 30 baht. The Australian is at 31.

[15Peter20]

also your (49.4) starting point for sterling maybe a little inflated. the pound was strong against the dollar over the immediate post new year period (a bit of a return to favour of risk assets) so it also saw a mini spike against the baht at the same time. this did not last long (2 days) and the pound has more or less gone back to where it was before xmass agst the dollar also a little bit worse than it was agst the bt. The bt has also been strong agst the dollar over the last few days maybe for the reasons cited above.

FWIW (IMO) sterling maybe a little bit cheap here against the dollar (and so prob also the bt) and medium term i would think there is a chance it will trend better. but week to week who knows.

My quote was referring to the 'TT' rate. I don't know what this means but I know that that is the rate we are being offered by the bank, and it always seems higher than the rate you would get if you just walked in off the street with sterling in cash.

You can see what I mean here:

http://www.bangkokbank.com/BangkokBank/PersonalBanking/DailyBanking/CurrencyExchange/Pages/FXRates.aspx#

It actually went up to 49.7 not long before I started taking an interest in it on a daily basis.

Gutted now I have to wait potentially ages to avoid losing money, but I guess things could be worse

[KhunOr]

Yes, the reason is simply that the Thai govt has just issued new bonds. They are at a high rate relative to many other alternative investments and this has attracted huge portfolio inflows and very active trade. The GBP and USD weakness against the baht is favourable for the Thai bond market. The rates are likely to continue to head lower. Sorry to be the bearer of bad news.

[yoshiwara]

Some of the above comments are pure junk. The reason for the distinct decline of the Pound the last few days against the baht, the $ and the Euro has little or nothing to do with baht policy. It is to do with 2 distinct factors: the first is the perceived political uncertainty arising from a threatened referendum to possibly withdraw from the EU. The second is that with the recovery of the Euro sterling appears less attractive. There is a third which is a sluggish recover/non-recovery, but this is just underpinning the first two. From 49 to 47 is a ~4% drop. The drop was quite distinct this morning but there has been some bounce-back and the pound continues within its usual narrow band. The drop however is a warning sign. Being anti-EU has a price.

[wordchild]

also your (49.4) starting point for sterling maybe a little inflated. the pound was strong against the dollar over the immediate post new year period (a bit of a return to favour of risk assets) so it also saw a mini spike against the baht at the same time. this did not last long (2 days) and the pound has more or less gone back to where it was before xmass agst the dollar also a little bit worse than it was agst the bt. The bt has also been strong agst the dollar over the last few days maybe for the reasons cited above.

FWIW (IMO) sterling maybe a little bit cheap here against the dollar (and so prob also the bt) and medium term i would think there is a chance it will trend better. but week to week who knows.

My quote was referring to the 'TT' rate. I don't know what this means but I know that that is the rate we are being offered by the bank, and it always seems higher than the rate you would get if you just walked in off the street with sterling in cash.

You can see what I mean here:

http://www.bangkokba...s/FXRates.aspx#

It actually went up to 49.7 not long before I started taking an interest in it on a daily basis.

Gutted now I have to wait potentially ages to avoid losing money, but I guess things could be worse

FWIW i think it is dangerous to get fixated on targeting a particular rate when you are going to need to bring the money in for personal expenditure anyway. whatever the reasons 49.4 was a highish sterling/baht level in the context of the last few months, it may get back there in the short term or it may not. while i think it maybe reasonable to hold off for a day or so as the negative move has been quite sharp at some point you have to accept it as it is. Edited January 17, 2013 by wordchild

[AyG]

"It seems that in the context of the stability of the past 2 years this is quite a dip."

If you have a look at the GBP/THB exchange rate chart for the last couple of years you'll see that a dip of this magnitude has occurred four times, so it's hardly an unusual occurrence - though, admittedly, this dip appears to have been somewhat swifter than the other three.

http://www.xe.com/currencycharts/?from=GBP&to=THB&view=2Y

[wordchild]

Some of the above comments are pure junk. The reason for the distinct decline of the Pound the last few days against the baht, the $ and the Euro has little or nothing to do with baht policy. It is to do with 2 distinct factors: the first is the perceived political uncertainty arising from a threatened referendum to possibly withdraw from the EU. The second is that with the recovery of the Euro sterling appears less attractive. There is a third which is a sluggish recover/non-recovery, but this is just underpinning the first two. From 49 to 47 is a ~4% drop. The drop was quite distinct this morning but there has been some bounce-back and the pound continues within its usual narrow band. The drop however is a warning sign. Being anti-EU has a price.

You are right to point to sterlings recent weakness though i dont agree entirely with your reasons. However i dont believe this is the full story. the baht itself has been unusually strong since 2nd jan against others eg USD 30.5 to 29.8 and ,for me most interestingly, against the MYR (Ringgit) 10.01 to 9.87 and the SGD (Sing Dollar) 25.06 to 24.35. This suggests some THB specific factors are also at work. Edited January 17, 2013 by wordchild

[wordchild]

Another thing to have in mind is that trading in THB is tightly controlled by the Bank of Thailand, it is not freely traded in the way the Sing Dollar is for example. There are some major currency realignments going on right now, in particular with the Japanese Govt attempt to manage a competitive decline in the Yen, and the baht has strengthened close to 13% against the Yen since November 2012. Either the BOT is relaxed about this move in the baht (esp relative to Thailands major trading partners) or (in my opinion more likely) you will see it start to act.

Edited January 17, 2013 by wordchild

[wordchild]

also your (49.4) starting point for sterling maybe a little inflated. the pound was strong against the dollar over the immediate post new year period (a bit of a return to favour of risk assets) so it also saw a mini spike against the baht at the same time. this did not last long (2 days) and the pound has more or less gone back to where it was before xmass agst the dollar also a little bit worse than it was agst the bt. The bt has also been strong agst the dollar over the last few days maybe for the reasons cited above.

FWIW (IMO) sterling maybe a little bit cheap here against the dollar (and so prob also the bt) and medium term i would think there is a chance it will trend better. but week to week who knows.

My quote was referring to the 'TT' rate. I don't know what this means but I know that that is the rate we are being offered by the bank, and it always seems higher than the rate you would get if you just walked in off the street with sterling in cash.

You can see what I mean here:

http://www.bangkokba...s/FXRates.aspx#

It actually went up to 49.7 not long before I started taking an interest in it on a daily basis.

Gutted now I have to wait potentially ages to avoid losing money, but I guess things could be worse

actually it touched 49.9 very briefly on the 2nd jan. the rates i am quoting are from Bloomberg and are the forex market live trading rates these would be tighter,in terms of spread, than the TT (Telegraphic Transfer) rate you would likely get quoted from Bangkok Bank and obviously much tighter than the kiosk rate. In any event the 2nd saw a mini spike in sterling relative to the baht and my point is dont set your heart on getting that rate again soon, though i would think a bit of a bounce back to 48.5 or so is possible in the short term . Just my opinion obviously. Edited January 17, 2013 by wordchild

[wordchild]

Just noticed a piece in the other English Language Thai newspaper discussing the Baht strength. It is pointing to the recent high level of overseas capital inflows into the Thai bond market very much in line with what KhunOr said above. The article also suggests the BOT is fairly relaxed about this for the moment; this, frankly, i doubt.

Edited January 17, 2013 by wordchild

[churchill]

'The currency pared gains after Finance Minister Finance Minister Kittiratt Na-Ranong said the baht is “not at a good level” and exporters will face difficulties should it strengthen further. The government has “no plan to use any drastic measures that will interfere with the market,” he said.'

http://sfgate.bloomberg.com/SFChronicle/Story?docId=1376-MGQXGZ6K50Z801-0LVA2Q7MT7QBLRQE36KE4VD0U0

[KhunOr]

Just noticed a piece in the other English Language Thai newspaper discussing the Baht strength. It is pointing to the recent high level of overseas capital inflows into the Thai bond market very much in line with what KhunOr said above. The article also suggests the BOT is fairly relaxed about this for the moment; this, frankly, i doubt.

Thank you for pointing that out!

Dow Jones reported just now that the BOT is starting to see signs of short term investment and speculative activity and that a sizeable amount of capital has flowed into Thai bond and also stock investments, thereby pushing up the baht (quoting Governor Prasarn Trairatvorakul). He added that the central bank has the "tools to take care of the baht" if needed.

[15Peter20]

Surely there is no desire on the part of the government to see THB strengthen any more. The rates over the past two years haven't been an accident. I'm expecting it to bounce back fairly shortly within the 2-year range. Each of the 4 or so times it has strengthened as drastically as this it has bounced back to a point around midway between the high and low points within about a month.

I'm gonna go with the recent history on this one. I don't see the causes behind the baht's behaviour as being seismic changes.

[54321]

Sorry not sure about why the rate has been moving so much but there are many good answers out there. I am more interested in the foreign currency account. Bkk bank London told me there is no facility to hold sterling and exchange it when the rate is favourable, you appear to be contradicting them. Is this cash you brought in or cash transfered from the UK?

[54321]

sorry, I re read your posting and assume you deposited cash here in Thailand

[15Peter20]

sorry, I re read your posting and assume you deposited cash here in Thailand

My apologies, maybe I wasn't being clear. The GBP was transferred from a UK bank account to a foreign currency account which was opened at a branch of Bangkok Bank in Thailand.

[MJP]

A pounding for sterling in 2013?

The year has begun with mutterings about the pound - with some suggesting that it is about to fall off a cliff.

http://www.bbc.co.uk/news/business-21059213

[Naam]

A pounding for sterling in 2013?

The year has begun with mutterings about the pound - with some suggesting that it is about to fall off a cliff.

http://www.bbc.co.uk...siness-21059213

Cameron's "loud thinking" of leaving the EU will add to Sterling's weakness.

[BlackPuddingBertha]

I am more interested in the foreign currency account. Bkk bank London told me there is no facility to hold sterling and exchange it when the rate is favourable, you appear to be contradicting them. Is this cash you brought in or cash transfered from the UK?

Most if not all the Thai banks here do foreign currency deposit accounts. Nothing unusual about them at all and their websites have details as to interest rates etc. Watch out for fees.

[chris2004]

A pounding for sterling in 2013?

The year has begun with mutterings about the pound - with some suggesting that it is about to fall off a cliff.

http://www.bbc.co.uk...siness-21059213

I thought it fell off the cliff in 2008.

[Naam]

A pounding for sterling in 2013?

The year has begun with mutterings about the pound - with some suggesting that it is about to fall off a cliff.

http://www.bbc.co.uk...siness-21059213

I thought it fell off the cliff in 2008.

Sterling's "cliff fall" versus Thai Baht started already in 2004.

[davidrkw]

UK will probably lose it's AAA rateing soon, possible cut in interest rates to .25%, more QE, doubts about UK staying in EU. The pound could tank. A rate of B40 or lower to the Pound is not impossible.

[nong38]

It seems to me that all, well almost all, want to see their currencies devalued to help exports, if they all the play the same game we end back where we started! That Thailand, as an exporting country, has seen fit not to play the same game seems odd and might make importing countries to look eleswhere for a better priced option, I wonder at what point does Thailand make a corrective move and how long will that take to take effect?

Currently we are in "high season" tourist wise, I have noticed in the last 3 or 4 years that this seems to be the low point for exchange rates against the bhat, we can hope it gets better soon, the tourists are stuck with what they get and perhaps they will re consider their destination for future years, depending on what you are looking for in that respect.

Meanwhile the US has stated that more quantative easing is in the pipeline and that means more devaluation for us all, Thailand is not as inexpensive as it once was and its costs are going up noticeably now, but with year on year visitors supposedly on a steady increase does anyone in the government seem bothered? Perhaps they are impervious to the situation.

Right now I think we would all settle for 50bts to 1GBP and similar for $ and Euro exchange rates.

Edited January 19, 2013 by nong38

[reflectionx]

Surely there is no desire on the part of the government to see THB strengthen any more. The rates over the past two years haven't been an accident. I'm expecting it to bounce back fairly shortly within the 2-year range. Each of the 4 or so times it has strengthened as drastically as this it has bounced back to a point around midway between the high and low points within about a month.

I'm gonna go with the recent history on this one. I don't see the causes behind the baht's behaviour as being seismic changes.

Fingers crossed you are right and it bounces back. Considering some real estate, the way the rate is currently is my boundary. If it goes any lower, my money goes elsewhere. Already losing $5k compared to the rate few weeks back.

[BlackPuddingBertha]

Sterling's "cliff fall" versus Thai Baht started already in 2004.

There's nothing like a good graph to prove .... anything you want.

The THB was 48 to the GBP in 1973 also.

[fletchsmile]

My view is USD/THB will push towards 29. GBP will weaken vs USD and I wouldn't be surprised to see it push towards 1.50. With that in mind don't be surprised to see GBP/THB pushing towards 45. There'll of course be ups and downs along the way, but I see more chance of GBP/THB at 45 than GBP/THB 50.

From a macro picture US and UK are in far worse shape than Thailand in terms of their economies, particularly relative to where they come from. They're going thru much tougher times than Thailand.

Examples: UK and US both have indulged in QE and increasing their money supplies. Both low interest rates look set to continue = unattractive currency. Both have(or had) their sovereign credit ratings under pressure. Both running large deficits. Both high debt to GDP levels etc etc. Both no or anemic growth. All these are negatives relative to where they are, and historically where they've come from. Relatively Thailand is better placed.

US seems a bit better placed than UK, and further along the curve - already downgraded, looks like small growth ahead, plus it's still looked at as the world's reserve currency - even if that's changing slowly.

Summed up US in a bad place, UK worse. Thailand doing relatively nicely.

Historically I used to aim to keep one third of my assets in GBP (where I was), one third in THB (where "I am"), and one third in other currencies. For various reasons (currency appreciation, strong investment returns, previously earning in THB etc) my THB exposure has moved to over 50%, and GBP and other currencies dropped.

I'm not overly uncomfortable with this. The way the world is at the moment, and given Thailand is our home now. I'm mindful of reducing my allocation to THB to more like 40%, when timing is right, as shocks always happen, but not into GBP and US at the moment.

Edited January 19, 2013 by fletchsmile

[15Peter20]

My view is USD/THB will push towards 29. GBP will weaken vs USD and I wouldn't be surprised to see it push towards 1.50. With that in mind don't be surprised to see GBP/THB pushing towards 45. There'll of course be ups and downs along the way, but I see more chance of GBP/THB at 45 than GBP/THB 50.

From a macro picture US and UK are in far worse shape than Thailand in terms of their economies, particularly relative to where they come from. They're going thru much tougher times than Thailand.

Examples: UK and US both have indulged in QE and increasing their money supplies. Both low interest rates look set to continue = unattractive currency. Both have(or had) their sovereign credit ratings under pressure. Both running large deficits. Both high debt to GDP levels etc etc. Both no or anemic growth. All these are negatives relative to where they are, and historically where they've come from. Relatively Thailand is better placed.

US seems a bit better placed than UK, and further along the curve - already downgraded, looks like small growth ahead, plus it's still looked at as the world's reserve currency - even if that's changing slowly.

Summed up US in a bad place, UK worse. Thailand doing relatively nicely.

Historically I used to aim to keep one third of my assets in GBP (where I was), one third in THB (where "I am"), and one third in other currencies. For various reasons (currency appreciation, strong investment returns, previously earning in THB etc) my THB exposure has moved to over 50%, and GBP and other currencies dropped.

I'm not overly uncomfortable with this. The way the world is at the moment, and given Thailand is our home now. I'm mindful of reducing my allocation to THB to more like 40%, when timing is right, as shocks always happen, but not into GBP and US at the moment.

Thanks a lot for your thoughts. If I may ask, what's your opinion on getting into gold? I'm looking to exit GBP as soon as possible and was wondering if that would be a good destination for it. Otherwise, even at 47 Baht to the GBP I might have to buy THB now given yours and others' forecasts.