GBP to THB Exchange Rate

[Naam]

The posted above fact stated that the £ dropping at start of QE is true; but once printed that money is in the system. Not printing more does not mean the money is taken out of the system its still there obviously. So we witnessed a bit of strengthening from investor flows but to think the £ will come back to pre QE levels really is wishful thinking I think.

wrong! QE money does not enter the system no matter how many gloom&doom gurus are spreading this fairy tale.

[Naam]

When I send money over from the UK I always send it in GB then it gets changed when it hits Thailand that seems the best way to get the most for your £ The days of the 70 to the £ are well over I would be happy to get 50 to the £ at this moment in time !!!!

Ladies and Gentlemen... we have a winner!

[Naam]

Back to 58-65 in flash

and then a jump to 96.5 in no time.

Really ,do you think it will go that high naam ? because you just couldnt be being sarcastic ,its not like you and you know everything ,dont you?

being, as opposed to many resident gurus, a layman GBPTHB 96.5 is a rather moderate but of course uneducated guess. the chances are excellent that Sterling reaches unseen heights vs. Thai Baht; perhaps 120 or even 150. after all... Brittania rules and the Baht is doomed.

[smedly]

This thread would be a lot more interesting if you guys would stop the pi%%ing contest and personal insults and keep it to facts only, people will always have different opinions and thoughts about world finance, may I suggest you voice your opinion but leave the off topic rants out of this

Never say to anyone they were wrong

Never say I told you so

Never voice a personal attack on anyone here because their projection didn't quite work out

If we can all do that then I might come back here with interest in hearing thoughts/views and not a bunch of personal attacks

leave it out guys there's no place for it here or anywhere else on TV

[mccw]

The posted above fact stated that the £ dropping at start of QE is true; but once printed that money is in the system. Not printing more does not mean the money is taken out of the system its still there obviously. So we witnessed a bit of strengthening from investor flows but to think the £ will come back to pre QE levels really is wishful thinking I think.

wrong! QE money does not enter the system no matter how many gloom&doom gurus are spreading this fairy tale.

The QE is created money to buy government debt; which the government uses/ has used; this is debt which does not need repaying/ the interest circles back to the government- so I'd say this has definitely diluted the £ and has indeed entered the system. Can you please reason your opposing views naam? I'm always happy to hear other views; I don't always assume to be right but just share my opinions- with reasonings to back them up. I guess an argument could be made that the QE was replacing, largely, existing private sector money/ debt that was destroyed/ defaulted on equaling a net zero addition, but the difference I see here is that unlike the old money/ debt the new QE money is not to be repaid or serviced.

[Ticker2000]

Of course it enters the system (monetary system) just not in terms of cash. Cash is one part of the money supply. The whole idea behind QE is to create liquidity by broadening the money supply- a greater amount of money in whatever form in the system.

Naam you arrogant misleading.... One question.

If the increase in money supply through QE does not enter the system where does it go???

[chiang mai]

NOT ROCKET SCIENCE

http://www.bloomberg.com/news/2013-10-02/baht-weakens-as-central-bank-to-cut-growth-forecasts-bonds-rise.html

UK continues to get stronger and Thailand continues to falter.

All with the back drop of a looming removal of QE - already in the UK.

You wait until the market really thinks that QE will be removed. Back to 58-65 in flash.

Look at the graph and in 2008 in line with the introduction of QE - direct correlation.

Regarding Direct Correlation: Just because it was that at one point doesn't necessarily imply that's what it will be again, were that the case we might point to pre 1997 and suggest that it will once again be 35, but we wouldn't do that because the fundamentals have changed in the meantime!

And as for the UK getting stronger: it might just be that there is some surface improvement in some areas of the UK economy but this is nowhere near the level implied in various press reports and articles. Even previously well respected offcial bodies have been drawn into the task of "ramping up" as a part of a hearts and minds campaign, read any reasonably well respected analyst or financial commentator and you'll soon see this is the case. And this is not about putting down the UK economy, it's about dealing in fact and fact only.

Finally on the withdrawl of QE: you have to ask yourself, will that ever happen completely and if so, will it be withdrawn at such a slow rate that the transitional impact will be negligible, I beleieve that to be the case and that the bigger threat from QE is, as another poster already stated, that it could be reintroduced into the UK at some point.

And finally finally, re. GDP: yes indeed Thailand has reduced its GDP estimates and they may well do so again before it's all over and done, but as things stand presently that estimate is at 3.7% which compares favorably to the UK's embryonic 0.7%. Given the state of the financials in both camps plus the state of the global economy, I'd say that 3.7% looks very respectable indeed.

[Huayrat]

The pound will remain strong ignore the doubters..

[i claudius]

Back to 58-65 in flash

and then a jump to 96.5 in no time.

Really ,do you think it will go that high naam ? because you just couldnt be being sarcastic ,its not like you and you know everything ,dont you?

being, as opposed to many resident gurus, a layman GBPTHB 96.5 is a rather moderate but of course uneducated guess. the chances are excellent that Sterling reaches unseen heights vs. Thai Baht; perhaps 120 or even 150. after all... Brittania rules and the Baht is doomed.

Brittania rules eh Naam ,well two world wars and one world cup wasnt a bad start, Still you have the French to help you now via the E.U

[chiang mai]

The pound will remain strong ignore the doubters..

Why not join the debate and give us some reasons why, then maybe people will change their minds?

[yoshiwara]

Just my opinion? As long as the sheep still think that Thailand's financial situation is stronger than it is, and for that matter other Asian countries including China,

There will continue to be an influx of foreign money, if only to draw interest on bank deposits.

I think it would take a significant reduction in that foreign money in Thailand, repatriated to its home country to significantly devalue the baht.

As long as there are all of these buyers of baht, I don't see it dropping a lot.

Add to that Thailand's ease of money laundering where there are those purchases of baht, and the baht stays relatively strong. Supply/demand.

I see the rice scheme, the new home scheme, the new car scheme an upcoming rubber scheme, consumer debt, a condo glut in places, and other signs as warning bells. That's not to mention Thailand's falling exports and imports (import tax money) and government deficits and corruption.

Other people don't see it that way and continue to pour money into Thailand. Every time they buy baht, it props up the price. If all of the above comes to an abrupt end, then the baht must fall. Will it?

If you are living in Thailand then you are pouring money into it every day and every time you visit the 7-11. If you have an up perspective on GBPTHB, then the only thing to do is dribble out your currency change until such time you feel comfortable to change larger amounts. That's all and that's all there is involved for most people. Investments and property are on a different level.

[Ticker2000]

So if the increase in money supply in full form through QE is not entering the system where is going mr know it all.

Awaiting to see if you know what you are talking about Naam.

[Ticker2000]

Another thought for all those that believe that the Gbp/baht is purely pegged to strength of USD.

USD has weakened against the baht over the last few weeks and yet the GBP has strengthened.

[chiang mai]

Another thought for all those that believe that the Gbp/baht is purely pegged to strength of USD.

USD has weakened against the baht over the last few weeks and yet the GBP has strengthened.

What was said earlier was that, "as GBP/USD rises and falls, GBP/THB rises and falls also", that does not imply however that the two pairs mirror each other for every satang or cent! The pairs simply follow the same pattern over time, if you look at the attachment in the earlier post or indeed, select your own timescale between the two pairs and compare them, you'll see the rule holds true.

[chiang mai]

I made an error earlier, I said that BOT foriegn reserves were steady at USD 168 bill. after falling USD 3.7 bill. in August, in fact subsequently the reserves grew and now stand at USD 171 bill. as of 20 Sept., the latest BOT reporting date.

[chiang mai]

Here's some ammo for the Baht is crashing brigade:

"The latest currency poll showed the Thai baht is expected to depreciate by 2.6 percent to 32 per dollar by September 2014".

http://www.reuters.com/article/2013/10/03/us-asia-forex-idUSBRE9920CR20131003

Unfortunately that's USD that's being discussed and not GBP and since GBP is currently at a high against USD, the implication should be clear.

[Ticker2000]

For Naam

If u r unsure about how to reply. Would suggest learning about the various m rules explaining the breakdown of the UK money supply. Or the system as you so crudely refer to. Still awaiting your reply as to where the increase in liquidity created by an expansion of the money supply through QE is going if not into the system (money supply - in it's full sense).

Is there another system (money supply) that we are all unaware of?

[Ticker2000]

Naam

This will help you understand monetary supply and is various composites (or the system that you crudely refer to).

http://en.m.wikipedia.org/wiki/Money_supply

[Ticker2000]

Good find Chiang Mai

When the market smells that the US really will reduce QE (which will happen) the Asian currencies will fall again. Most of the fall will be priced in before it happens as those in the know know way before us.

It will not be a crash but it will be a serious readjustment as happened quickly when QE started.

[chiang mai]

I wouldn't call a 2% adjustment serious and I think 32 is at the lower end of BOT's expectation scale, remember, they could always spend some reserves and fight any weakening which is what they appeared to do in August. The other point is that THB is a very small currency and one that's not widely traded, it wouldn't cost that much to defend it. So it's really not the market that has the say here, it's BOT, the markets can't really drive USD/THB because it's such a closely controlled currency.

[Ticker2000]

It took circa 4/5 months for the baht to drop from the mid 60's to early mid 50's in 2008 in direct correlation to the US introduction of QE. The thai economy although not weak is decidedly more shaky than in 2008. This will only serve to compound the devaluation of the THB when (and just before) the US tapering occurs (which will occur).

One question for the forum. What others factors bar QE do you think contributed contributed to THB large appreciation in such a short period in 2008.

If u can suggest nothing substantial it is logical that a similar adjustment should occur across the basket of Asian currencies once QE is removed.

[fletchsmile]

there's no return on any cash which exceeds inflation.

When the financial crises of 2007 kicked off, managed to get a return of 6.27% tax free for 4 years in the UK, that was way above inflation at the time so it does happen but not often and you have to move very fast. This was the time when people were queuing outside Northern Rock for their money. The rates were soon cut back and interest rates dived, I think I was just lucky to see what was happening and took advantage.

This was a one off. otherwise what Naam says is the norm.

The problem with that also for someone based in Thailand is that GBP dropped about 25% between Dec07 and Dec11.

In THB terms therefore you earned next to nothing - any interest was effectively wiped out by exchange rate loss. The return was below inflation in THB terms for someone living here with expenses in Thailand.

Cheers

Fletch

[mccw]

It took circa 4/5 months for the baht to drop from the mid 60's to early mid 50's in 2008 in direct correlation to the US introduction of QE. The thai economy although not weak is decidedly more shaky than in 2008. This will only serve to compound the devaluation of the THB when (and just before) the US tapering occurs (which will occur).

One question for the forum. What others factors bar QE do you think contributed contributed to THB large appreciation in such a short period in 2008.

If u can suggest nothing substantial it is logical that a similar adjustment should occur across the basket of Asian currencies once QE is removed.

You agree with the money supply increase that taken place and that lead to the drop of £/ dollar. But stopping printing, as I said before, doesn't withdraw that money; so the dilution effect is still there. The factoring in of taper is accounting for this recent rise/ its priced in already. I can't see any reason, other than a massive problem thai side, that would send the £ back to pre printing levels. I think the 50-52 area is the top of this larger range on existing factors, maybe a touch more but not over 55.

Regards the US tapering, watch what happens to the interest rates and then see if the government can afford not the keep supporting the bond market; that will be very interesting.

Again, demographics wise we have 30years of problems ahead of us. The uk conservatives seem to be trying to tackle it with out upsetting things by cutting too far like med. They proposed today to withdraw all benifits for the under twenty fives if they are handed a majority at the next election. Them winning is key to £ at least holding on to some value. Labour will do what they do, spend and borrow and probably print a load too this time around also. Who ever gets it though I think the outlook is difficult to say the least.

QE might not be coming right now but its 100% sure I think for a few years away. Example if bonds start rising; interest rates, there is so much debt in the system that a few % up would send vast swaths of house hold underwater, especially due to the increasing costs of living that so far have been off set by lower mortgage payments somewhat; also the business world is all stacked full of debts, zombie companies, its been written about extensively the last few years, nothing's changed much really, its just become unfashionable to talk about (or maybe some persuasions have been sent down for a talking up and quietly on negatives). 0.7 rather than 0.3 doesn't seem like a huge cause for optimisism as if boom times are back.

Big wild card is the EU membership referendum; what effect would a withdrawal vote have on the pound do posters think?

[chiang mai]

It took circa 4/5 months for the baht to drop from the mid 60's to early mid 50's in 2008 in direct correlation to the US introduction of QE. The thai economy although not weak is decidedly more shaky than in 2008. This will only serve to compound the devaluation of the THB when (and just before) the US tapering occurs (which will occur).

One question for the forum. What others factors bar QE do you think contributed contributed to THB large appreciation in such a short period in 2008.

If u can suggest nothing substantial it is logical that a similar adjustment should occur across the basket of Asian currencies once QE is removed.

It's far too simplistic to say, that's the way things were before QE so once QE ends, things will be exactly the same way again! For example, at end 2007 the foriegn currency reserves held by BOT were USD 80 bill, today they are double that ammount, ditto GDP - do you exxpect all economic indicators to revert to 2007 levels at the same time!

[Naam]

Of course it enters the system (monetary system) just not in terms of cash. Cash is one part of the money supply. The whole idea behind QE is to create liquidity by broadening the money supply- a greater amount of money in whatever form in the system.

Naam you arrogant misleading.... One question.

If the increase in money supply through QE does not enter the system where does it go???

i have no intention to waste my and anybody else's precious time with additional arrogant and misleading claims.

[Ticker2000]

It took circa 4/5 months for the baht to drop from the mid 60's to early mid 50's in 2008 in direct correlation to the US introduction of QE. The thai economy although not weak is decidedly more shaky than in 2008. This will only serve to compound the devaluation of the THB when (and just before) the US tapering occurs (which will occur).

One question for the forum. What others factors bar QE do you think contributed contributed to THB large appreciation in such a short period in 2008.

If u can suggest nothing substantial it is logical that a similar adjustment should occur across the basket of Asian currencies once QE is removed.

It's far too simplistic to say, that's the way things were before QE so once QE ends, things will be exactly the same way again! For example, at end 2007 the foriegn currency reserves held by BOT were USD 80 bill, today they are double that ammount, ditto GDP - do you exxpect all economic indicators to revert to 2007 levels at the same time!

Granted and no I do not hence why I asked: One question for the forum. What others factors bar QE do you think contributed contributed to THB large appreciation in such a short period in 2008.

I do however think that some on this board are underestimating the swing that will occur when QE is withdrawn (US) and no I do not believe it is entirely priced in yet by some way.

If there is a major withdrawal of funds from emerging markets then the foreign fund reserves will appear insignificant.

It took circa 2 months for the rate to slip to 50-51 (circa 20% - that was the speed it fell at in 2008) in light of a looming tapering. If the BOT did anything to curb the depreciation it did not work - the only thing that stopped the slip was the FED saying that it would not taper just yet. Most importantly the GBP has stayed at the circa the same level of 50 since. Telling us that markets are happy with rate with no fixed date for tapering. Wait until we get a fixed date or a shock announcement. I believe you believe Chiang Mai that the BOT did not intervene. Do you still hold that view?

I do agree however that at present the US and UK should not want their currencies to become to strong too quickly as the move out of recession - for obvious reasons.

To the poster that said beware of interest movements in the west and the resultant problems. The is clear historical trend is that governments/central banks are extremely slow at increasing in interest rates even with post recession ravaging inflation when interest rate increases would be prudent - the reason being they prefer to inflate the debts away - for obvious reasons.

I do agree that if labour gets in forget it and I do not really know what to think about the EU ref and its effect. Depends if the market will do better by itself.....

[chiang mai]

It was stated publicly that BOT had intervened in the markets to the tune of USD 3.76 bill. and this was reflected in the BOT stats for August. But let's be clear, BOT spent money trying to weaken THB at a time when it was naturally very strong, the reversal caused by the potential ending of QE was actually a welcome relief since it meant THB weakened more naturally and at no cost to the BOT - the reserves have subsequently been made up and more.

I don't share your pessimissm re. the effects of ending QE and I think the earlier article citing the views of the 40+ economists is more likely, a 2% fall against USD by September 2014 is about as bad as I think it will get and even that may yet be good news since it strengthens the Thai export position.

Against GBP, that's a whole different story, I continue to believe very very strongly that GBP will weaken against USD and last night I put my money on this again by buying USD for a second time, this at 1.62.

[Naam]

It was stated publicly that BOT had intervened in the markets to the tune of USD 3.76 bill. and this was reflected in the BOT stats for August.

that is correct but that statement in context with $3.76bb was made by you Chiang Mai.

the fact that the reserves are down does not necessarily prove any intervention. reserves are used for a variety of reasons. among them allocation of foreign currency to importers and fluctuations up/down of (in the discussed case) 2% are negligible.

sigh... here we are back to "who, what or why are reserves and their purposes?"

[chiang mai]

It was stated publicly that BOT had intervened in the markets to the tune of USD 3.76 bill. and this was reflected in the BOT stats for August.

that is correct but that statement in context with $3.76bb was made by you Chiang Mai.

the fact that the reserves are down does not necessarily prove any intervention. reserves are used for a variety of reasons. among them allocation of foreign currency to importers and fluctuations up/down of (in the discussed case) 2% are negligible.

sigh... here we are back to "who, what or why are reserves and their purposes?"

No, the statement was made by BOT in the newspaper whose name cannot be mentioned and reiterated by our beloved Finance Minister.

I'm not allowed to post the article but here's an extract:

EDIT: apologies, posted the wrong article.

"Reserves increased slightly because the BoT had to intervene in the money market to curb the baht's fluctuation by purchasing US dollars on the spot market, the central bank said".

google: BOT intervention for the remainder plus others.

Edited October 4, 2013 by chiang mai

[mommysboy]

It took circa 4/5 months for the baht to drop from the mid 60's to early mid 50's in 2008 in direct correlation to the US introduction of QE. The thai economy although not weak is decidedly more shaky than in 2008. This will only serve to compound the devaluation of the THB when (and just before) the US tapering occurs (which will occur).

One question for the forum. What others factors bar QE do you think contributed contributed to THB large appreciation in such a short period in 2008.

If u can suggest nothing substantial it is logical that a similar adjustment should occur across the basket of Asian currencies once QE is removed.

You agree with the money supply increase that taken place and that lead to the drop of £/ dollar. But stopping printing, as I said before, doesn't withdraw that money; so the dilution effect is still there. The factoring in of taper is accounting for this recent rise/ its priced in already. I can't see any reason, other than a massive problem thai side, that would send the £ back to pre printing levels. I think the 50-52 area is the top of this larger range on existing factors, maybe a touch more but not over 55.

Regards the US tapering, watch what happens to the interest rates and then see if the government can afford not the keep supporting the bond market; that will be very interesting.

Again, demographics wise we have 30years of problems ahead of us. The uk conservatives seem to be trying to tackle it with out upsetting things by cutting too far like med. They proposed today to withdraw all benifits for the under twenty fives if they are handed a majority at the next election. Them winning is key to £ at least holding on to some value. Labour will do what they do, spend and borrow and probably print a load too this time around also. Who ever gets it though I think the outlook is difficult to say the least.

QE might not be coming right now but its 100% sure I think for a few years away. Example if bonds start rising; interest rates, there is so much debt in the system that a few % up would send vast swaths of house hold underwater, especially due to the increasing costs of living that so far have been off set by lower mortgage payments somewhat; also the business world is all stacked full of debts, zombie companies, its been written about extensively the last few years, nothing's changed much really, its just become unfashionable to talk about (or maybe some persuasions have been sent down for a talking up and quietly on negatives). 0.7 rather than 0.3 doesn't seem like a huge cause for optimisism as if boom times are back.

Big wild card is the EU membership referendum; what effect would a withdrawal vote have on the pound do posters think?

There were other factors too: a huge capital flight to perceived safer currencies, burgeoning public dept, and low interest rates. The BoE also had a hand in talking the pound down as much as it could. So the simplistic argument does not hold, in fact QE was an instrument used to control the monetary supply, it is not an underlying cause as such.