US dollar vs Thai Baht moving up and down like a YoYo

[Nowhereman60]

I looked at the Thai Baht exchange rate today and it was up about 30 stang to the dollar, 10 minutes later it was down 20 stang. This has been going on for a few days now. What's going on. Is the BOT intervening like it said it was not going to do when the baht was getting stronger. Please help explain this to me.

[AnotherOneAmerican]

The baht is falling like crazy.

BoT keep pouring in money to keep it up.

Once Bot run out of readys, there will be a big fall.

[Berkshire]

The baht is falling like crazy.

BoT keep pouring in money to keep it up.

Once Bot run out of readys, there will be a big fall.

Did you just make this up? BOT has nothing to do with this. It's the foreign capital inflows/outflows.

[Lancelot]

Are you comparing data from two different exchange sites? Or from different days?

Any way, I personally expect to see choppy exchange rates for the USD because Mr. Bernake, the US Fed boss, is signalling that QE (bond purchases) will at some future point decrease. The exchange markets are usure when and to what degree this will take place. Uncertainty makes markets nervous- and volatile.

When the US increased its money supply with bond purchase, alot of that "hot" money found its way to developing economies, seeking higher returns. Now that the money starts to flow out of those countries, Thailand included, the demand for US dollars will increase, thereby decreasing the demand for the local currency (Thai Baht.)

Supply and demand: fewer dollars = stronger dollar.

Edited June 20, 2013 by Lancelot

[Nowhereman60]

Are you comparing data from two different exchange sites? Or from different days?

Any way, I personally expect to see choppy exchange rates for the USD because Mr. Bernake, the US Fed boss, is signalling that QE (bond purchases) will at some future point decrease. The exchange markets are usure when and to what degree this will take place. Uncertainty makes markets nervous- and volatile.

When the US increased its money supply with bond purchase, alot of that "hot" money found its way to developing economies, seeking higher returns. Now that the money starts to flow out of those countries, Thailand included, the demand for US dollars will increase, thereby decreasing the demand for the local currency (Thai Baht.)

Supply and demand: fewer dollars = stronger dollar.

No, I am using the same website, looking day to day.

[Braddockrd]

Are you comparing data from two different exchange sites? Or from different days?

Any way, I personally expect to see choppy exchange rates for the USD because Mr. Bernake, the US Fed boss, is signalling that QE (bond purchases) will at some future point decrease. The exchange markets are usure when and to what degree this will take place. Uncertainty makes markets nervous- and volatile.

When the US increased its money supply with bond purchase, alot of that "hot" money found its way to developing economies, seeking higher returns. Now that the money starts to flow out of those countries, Thailand included, the demand for US dollars will increase, thereby decreasing the demand for the local currency (Thai Baht.)

Supply and demand: fewer dollars = stronger dollar.

Excellent explanation

[Nowhereman60]

I can understand the baht either going up or down but I have not seen it going up and down this much so fast. Usually it's one way or the other not up and down.

[chiang mai]

The baht is falling like crazy.

BoT keep pouring in money to keep it up.

Once Bot run out of readys, there will be a big fall.

Proof and/or link or it's not true and you made it up.

[Braddockrd]

So what are the reasons? anxiety or speculation in the forex markets? I personally doubt the BOT can have too much control in these circumstances

[Lancelot]

Perhaps you are looking at a real time currency quotes, so yes they would vary. I doubt that the BOT is intervening because I suspect that a weaker THB is excatly what they want. Thailand has good fundamentals so I don't see the baht "crashing" any time soon.

Probably currency traders felt that the baht was oversold, so they jumped in to buy for a quick profit

[chiang mai]

Perhaps you are looking at a real time currency quotes, so yes they would vary. I doubt that the BOT is intervening because I suspect that a weaker THB is excatly what they want. Thailand has good fundamentals so I don't see the baht "crashing" any time soon.

Probably currency traders felt that the baht was oversold, so they jumped in to buy for a quick profit

BOT was reported at the end of last as intervening to prevent THB from falling too far, governement wants a goldilocks solution to this but may not get it if markets says otherwise.

Edited June 20, 2013 by Rimmer
Link removed

[yoshiwara]

I can understand the baht either going up or down but I have not seen it going up and down this much so fast. Usually it's one way or the other not up and down.

Can we label USDTHB the Soi 6 trade?

[Nowhereman60]

I can understand the baht either going up or down but I have not seen it going up and down this much so fast. Usually it's one way or the other not up and down.

Can we label USDTHB the Soi 6 trade?

No, idea what the hell you are talking about.

[kotsak]

I can understand the baht either going up or down but I have not seen it going up and down this much so fast. Usually it's one way or the other not up and down.

Can we label USDTHB the Soi 6 trade?

As long as it's protected

[Gsxrnz]

Volatile market in fairly narrow bands. Money being made on all the crosses if you're quick enough and aren't holding the wrong side of the trade when the markets decide that the uncertainty becomes a certainty.

Currency traders are basically playing Texas Hold 'em until enough traders have covered their required margins or believe a shift is imminent and then it will be a panic buy/sell and realignment. It's the sentiment (and balls) of the traders that dictates the currency movements. Nothing new in this, it's just the way it works.

[Lancelot]

Perhaps you are looking at a real time currency quotes, so yes they would vary. I doubt that the BOT is intervening because I suspect that a weaker THB is excatly what they want. Thailand has good fundamentals so I don't see the baht "crashing" any time soon.

Probably currency traders felt that the baht was oversold, so they jumped in to buy for a quick profit

BOT was reported at the end of last as intervening to prevent THB from falling too far, governement wants a goldilocks solution to this but may not get it if markets says otherwise.

http://www.bangkokpost.com/breakingnews/354916/thai-central-bank-sells-dollars-as-baht-falls

Thanks for the article CM. Perhaps the Thai Central Bank was demonstrating/testing their ability to "manage" the bahts decline. My hunch is that a weaker baht would be fine with the Thai government; however, they want to see it weaken gradually.Understandable since petroleum is imported and infront of every exhaust pipe is a voter

[topt]

I can understand the baht either going up or down but I have not seen it going up and down this much so fast. Usually it's one way or the other not up and down.

Can we label USDTHB the Soi 6 trade?

No, idea what the hell you are talking about.

If I said it was an (In)famous street of short time bars in Pattaya would it be clearer

[Naam]

The baht is falling like crazy.

BoT keep pouring in money to keep it up.

Once Bot run out of readys, there will be a big fall.

it's the aliens, not the Bot!

[monty]

The baht is falling like crazy.

BoT keep pouring in money to keep it up.

Once Bot run out of readys, there will be a big fall.

it's the aliens, not the Bot!

Aah, so it's us!

According to Thai immigration and business law, we foreigners are the aliens! :)

[55Jay]

I can understand the baht either going up or down but I have not seen it going up and down this much so fast. Usually it's one way or the other not up and down.

Can we label USDTHB the Soi 6 trade?

No, idea what the hell you are talking about.

Appropriate. I left a tip in pounds once, it was rejected. I tried Euros, she said I was getting warmer. Pulled out a dollar, she smiled broadly and called me a handsum man.

[SaorAlba]

It's moving down because Bernanke said he would cut stimulus debt as US economy recovering, so investors took 2.6 billion usd out of Thai emerging markets investments since May - as considered risky.

Bernanke more or less confirmed yesterday that he will end stimulus - so expect baht to weaken more

[Eesat]

The baht is falling like crazy.

BoT keep pouring in money to keep it up.

Once Bot run out of readys, there will be a big fall.

There is NO country or economy with sufficient funds to influence the USD $4 trillion per day Foreign Exchange market!

[Eesat]

It's moving down because Bernanke said he would cut stimulus debt as US economy recovering, so investors took 2.6 billion usd out of Thai emerging markets investments since May - as considered risky.

Bernanke more or less confirmed yesterday that he will end stimulus - so expect baht to weaken more

Bernanke can say that America will service their massive debt with magic beans if he likes,his suitcase is by the door and he's out of the Fed within a month!The most worrying part is they don't even seem to have a shortlist for his job appointment!

[Eesat]

I can understand the baht either going up or down but I have not seen it going up and down this much so fast. Usually it's one way or the other not up and down.

It's called "Volatility"!

[Pib]

I see today in one of the major local English language newspapers that the Bank of Thailand governor said the BOT would allow the baht to move more freely in the FX market. Then he went on to talk the Fed QE tapering...to me he was implying it is affecting the baht. And this morning I saw the Fed Chairman personally say the QE tapering would most likely begin late this year/2013 and be completed by mid 2014.

I just looked at Bloomberg.com for the baht exchange rate and at this millisecond in time its at 31.12/USD....over 31 again...whoopee. We just may see the baht continue to depreciate against the USD for a while...or should I say the USD appreciate against the baht.

Edited June 20, 2013 by Pib

[Eesat]

I see today in one of the major local English language newspapers that the Bank of Thailand governor said the BOT would allow the baht to move more freely in the FX market. Then he went on to talk the Fed QE tapering...to me he was implying it is affecting the baht. And this morning I saw the Fed Chairman personally say the QE tapering would most likely begin late this year/2013 and be completed by mid 2014.

I just looked at Bloomberg.com for the baht exchange rate and at this millisecond in time its at 31.12/USD....over 31 again...whoopee. We just may see the baht continue to depreciate against the USD for a while...or should I say the USD appreciate against the baht.

Bernanke's speech has caused a big market correction overnight,with the USD strengthening against all the other Majors,gold has dropped below USD $1,300 per troy ounce but has bounced back over,whether it will find support there is another matter!

The Aussie Dollar is getting absolutely crushed around USD $0.92 cents!

[bkksiam]

My understanding is that the current lowering of the baht is due mostly to the strength of the american economy-so investors are transferring their money out of places like Thailand back into the US. The baht's strength is dependent on the two big economies- the US and China. Local politics may play a role as well in volatility for example in discouraging purchases of bonds and investments in the country. Recent mistakes in calculations and projections by government and local credit ratings can also make it a less enticing place for investors to, for example, buy bonds. If the political situation becomes more unstable there could be a further decline in the baht.

Don't forget as well that, to a degree, its value is relative- so if US dollar is high then you'll get a better exchange. If you google baht historical you will be able to see how it has changed over time http://www.freecurrencyrates.com/exchange-rate-history/USD-THB/2013 . Check rates at siam commercial bank: http://www.scb.co.th/scb_api/index.jsp There you will see that the rate changes from 10 to 15 times per day. It's something worth paying attention to if you plan on spending a lot of money here- a fraction of a point can mean the difference in thousand of dollars. If you are planning on moving big bucks then select the bank with the best rate- e.g. for today at 9:15, the telegraphic transfer selling rate was 30.75 at siam. At the bangkok bank around the same time it was 30.85 whereas the kasikorn bank was 30.94- negligible differences when you're dealing with a few hundred dollars but once you get into the hundreds of thousands it makes it significant difference.

[Pib]

My understanding is that the current lowering of the baht is due mostly to the strength of the american economy-so investors are transferring their money out of places like Thailand back into the US. The baht's strength is dependent on the two big economies- the US and China. Local politics may play a role as well in volatility for example in discouraging purchases of bonds and investments in the country. Recent mistakes in calculations and projections by government and local credit ratings can also make it a less enticing place for investors to, for example, buy bonds. If the political situation becomes more unstable there could be a further decline in the baht.

Don't forget as well that, to a degree, its value is relative- so if US dollar is high then you'll get a better exchange. If you google baht historical you will be able to see how it has changed over time http://www.freecurrencyrates.com/exchange-rate-history/USD-THB/2013 . Check rates at siam commercial bank: http://www.scb.co.th/scb_api/index.jsp There you will see that the rate changes from 10 to 15 times per day. It's something worth paying attention to if you plan on spending a lot of money here- a fraction of a point can mean the difference in thousand of dollars. If you are planning on moving big bucks then select the bank with the best rate- e.g. for today at 9:15, the telegraphic transfer selling rate was 30.75 at siam. At the bangkok bank around the same time it was 30.85 whereas the kasikorn bank was 30.94- negligible differences when you're dealing with a few hundred dollars but once you get into the hundreds of thousands it makes it significant difference.

Some analysts would say the reduction in Fed QE reduces the amount of money/USDs investors have to invest in riskier assets such as emerging markets...and Thailand is an emerging market.

When it comes to trying to time the arrival of wire transfer which can take several days to arrive/post to your Thai bank account the numerous exchange rate changes during a day probably shouldn't be much of a concern; instead, a person should look more at the trend over several days or weeks.

Good point about how the exchange rate, especially the TT Buying Rate for incoming wire transfers, can change numerous times during the day at Thai banks. As a Bangkok Bank customer on a wild FX day, like today, I've seen around a half dozen exchange rate changes/updates...I just looked at the Bangkok Bank exchange rate webpage and they had 5 rate changes today counting their opening rate. But SCB had 14 rate changes today counting their opening rate. Yea, trying to time the arrival of your incoming wire transfer when you really have little to no control over the arrival time, it's probably best to schedule (bet) your wire transfers on short term trends.

[jellydog]

Up over 31 and the baht will continue to weaken. Global $ will move out and China slowing down. Not exactly a perfect storm, but not all that far from it.

[Gsxrnz]

My understanding is that the current lowering of the baht is due mostly to the strength of the american economy-so investors are transferring their money out of places like Thailand back into the US. The baht's strength is dependent on the two big economies- the US and China. Local politics may play a role as well in volatility for example in discouraging purchases of bonds and investments in the country. Recent mistakes in calculations and projections by government and local credit ratings can also make it a less enticing place for investors to, for example, buy bonds. If the political situation becomes more unstable there could be a further decline in the baht.

Don't forget as well that, to a degree, its value is relative- so if US dollar is high then you'll get a better exchange. If you google baht historical you will be able to see how it has changed over time http://www.freecurrencyrates.com/exchange-rate-history/USD-THB/2013 . Check rates at siam commercial bank: http://www.scb.co.th/scb_api/index.jsp There you will see that the rate changes from 10 to 15 times per day. It's something worth paying attention to if you plan on spending a lot of money here- a fraction of a point can mean the difference in thousand of dollars. If you are planning on moving big bucks then select the bank with the best rate- e.g. for today at 9:15, the telegraphic transfer selling rate was 30.75 at siam. At the bangkok bank around the same time it was 30.85 whereas the kasikorn bank was 30.94- negligible differences when you're dealing with a few hundred dollars but once you get into the hundreds of thousands it makes it significant difference.

Some analysts would say the reduction in Fed QE reduces the amount of money/USDs investors have to invest in riskier assets such as emerging markets...and Thailand is an emerging market.

When it comes to trying to time the arrival of wire transfer which can take several days to arrive/post to your Thai bank account the numerous exchange rate changes during a day probably shouldn't be much of a concern; instead, a person should look more at the trend over several days or weeks.

Good point about how the exchange rate, especially the TT Buying Rate for incoming wire transfers, can change numerous times during the day at Thai banks. As a Bangkok Bank customer on a wild FX day, like today, I've seen around a half dozen exchange rate changes/updates...I just looked at the Bangkok Bank exchange rate webpage and they had 5 rate changes today counting their opening rate. But SCB had 14 rate changes today counting their opening rate. Yea, trying to time the arrival of your incoming wire transfer when you really have little to no control over the arrival time, it's probably best to schedule (bet) your wire transfers on short term trends.

Ho hum......THB and the USD and NZD and the AUD are all over the show, but day trading in this environment is like shooting fish in a barrel with a howitzer. Long live volatility, 'cause I'm as happy as a pig in <deleted> at the moment.

Edited June 20, 2013 by Gsxrnz