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

[Eesat]

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.

The value of the US Dollar to the Thai Baht is not relative to a degree,meaning if the dollar is high you get a better exchange rate!Currencies are traded in pairs by banks overnight,that's what overnight interest rate are,the rate at which banks lend money to each other.

If one goes up,the other goes down,it's a see-saw effect.No ifs,no buts,no realatives,that's how it works.Siam Commercial Bank and every other bank's rates change literally by the second,it is up to them how many times they update the exchange rate throughout the day.

I will bet money however that when the Baht drops,they don't update their rates as quickly as when it goes up!

Edited June 20, 2013 by Eesat

[12DrinkMore]

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.

But where are the higher returns coming from next?

The money won't go into bonds or the stock market, so it'll be left in USD's sitting there, waiting for the Bernanke to make another utterance.

We need the Chinese, the Indians and the rest of Asia to get their show together and reduce the world's dependence on the USD.

[Eesat]

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.

Not really because this is one of the problems with printing money,how do you get it out to the man on the street,or into the system and to the small business owner?Ben Bernanke's nickname is "Helicopter" Ben after he stated once that literally going around in a helicopter and throwing money out onto the streets would be the best way to do it!

The banks don't want to lend monies given to them as there is still a lot of risk of default on any loans,which caused the credit crunch in the first place,the sub-prime mortgage market in the US.They were lending money to a subset of people who's acronym was NINJAs,which stands for 'No job,no income or assets'!

How on earth they thought these people were going to repay the monies lent to them heaven only knows!

As for changing money,don't do it on a day when big news is out,it's like some traders don't like to trade volatile markets which makes sense as a range-trading market is much easier to make money from.

Edited June 20, 2013 by Eesat

[12DrinkMore]

Not really because this is one of the problems with printing money,how do you get it out to the man on the street,or into the system and to the small business owner?Ben Bernanke's nickname is "Helicopter" Ben after he stated once that literally going around in a helicopter and throwing money out onto the streets would be the best way to do it!

The banks don't want to lend monies given to them as there is still a lot of risk of default on any loans,which caused the credit crunch in the first place,the sub-prime mortgage market in the US.They were lending money to a subset of people who's acronym was NINJAs,which stands for 'No job,no income or assets'!

How on earth they thought these people were going to repay the monies lent to them heaven only knows!

As for changing money,don't do it on a day when big news is out,it's like some traders don't like to trade volatile markets which makes sense as a range-trading market is much easier to make money from.

The banks do not lend out a single bit of the money that is deposited with them.

Not one single satang or cent.

They create the stuff out of nothing and dish it out, charging for it of course.

[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.

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.

There are two types of transfers. One takes several days. The other is almost instant. If you are transferring US dollars and you tell your US bank "do not convert. Send as US dollars", the transfer should happen almost immediately-e.g., overnight. If your US bank first has to convert into Thai baht before sending then you will have to wait 2-3 days for the transfer to take place. Also note that, in this case, you should compare rates and hope that the US bank is giving you at least as good or better than the Thai bank will give you. If you transfer without converting, (e.g., you transfer unconverted US dollars) you then have to contact your Thai bank and instruct them to convert. Before you do all this, talk to at least more than one person at the Thai bank and hope that they both tell you the same thing. Ask them if you can choose the moment or time of day or time of week when to convert or whether the conversion must be made at the moment the money is received.

Using my experience as an example, I once transferred overnight using the currency of my country unconverted. The transfer occurred immediately (not 2-3 days). I called the thai bank at about 8:45 am and they quoted me the 8:30 rate but then I asked another question and got transferred to someone else, then finally transferred to another person. By the time I learned that I had to officially say "please convert now," I was told that the 8:30 rate no longer applied. The new rate at which the thai bank was going to convert was lower than the 8:30 rate and this meant that, in fact, I'd receive the equivalent of about 25,000 fewer baht. I tried to explain to the person on the other end that the 8:30 rate should have applied. I got cut off, tried calling back etc etc. Finally I called back later and the person I spoke with said- "we will give you a special rate." This rate turned out to be a fraction higher than the 8:30 rate so I accepted it.

Furthermore, check with the bank that is transferring your money into Thailand to be sure they understand DO NOT convert. When I first tried to do this, in spite of my explicit instructions they converted first. Once I realized the mistake, I had to recall the transfer. My bank incurred the cost of the mistake fortunately. Then, they had to do the transfer a second time. That reminds me as well of another point to be wary of. My bank wanted to charge me 2 fees to do the transfer -one for their bank and one for the thai bank. The one for the thai bank was at lot higher than what my thai bank had quoted me- thai banks charge a maximum of about 500 baht for a TT transfer. So I selected the option of paying the conversion cost at the thai end.

Remember that incoming bank transfers get a better rate already than the normal exchange rate- it's the TT buying rate (i.e. they are buying your currency-I think I accidentally said the opposite in my first post-oops) on the list of rates posted by the bank.

The moral of my long drawn-out story is that, if I had my time back, I would have checked more carefully to find out who decides (and at what time exactly) at what rate the conversion takes place. I also would have had the name and telephone number of that person.

[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.

The value of the US Dollar to the Thai Baht is not relative to a degree,meaning if the dollar is high you get a better exchange rate!Currencies are traded in pairs by banks overnight,that's what overnight interest rate are,the rate at which banks lend money to each other.

If one goes up,the other goes down,it's a see-saw effect.No ifs,no buts,no realatives,that's how it works.Siam Commercial Bank and every other bank's rates change literally by the second,it is up to them how many times they update the exchange rate throughout the day.

I will bet money however that when the Baht drops,they don't update their rates as quickly as when it goes up!

I meant it is relative in the sense that the overall rate is not soley dependent on the thai baht or on what is happening in thailand.

[12DrinkMore]

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.

There are two types of transfers. One takes several days. The other is almost instant. If you are transferring US dollars and you tell your US bank "do not convert. Send as US dollars", the transfer should happen almost immediately-e.g., overnight. If your US bank first has to convert into Thai baht before sending then you will have to wait 2-3 days for the transfer to take place. Also note that, in this case, you should compare rates and hope that the US bank is giving you at least as good or better than the Thai bank will give you. If you transfer without converting, (e.g., you transfer unconverted US dollars) you then have to contact your Thai bank and instruct them to convert. Before you do all this, talk to at least more than one person at the Thai bank and hope that they both tell you the same thing. Ask them if you can choose the moment or time of day or time of week when to convert or whether the conversion must be made at the moment the money is received.

Using my experience as an example, I once transferred overnight using the currency of my country unconverted. The transfer occurred immediately (not 2-3 days). I called the thai bank at about 8:45 am and they quoted me the 8:30 rate but then I asked another question and got transferred to someone else, then finally transferred to another person. By the time I learned that I had to officially say "please convert now," I was told that the 8:30 rate no longer applied. The new rate at which the thai bank was going to convert was lower than the 8:30 rate and this meant that, in fact, I'd receive the equivalent of about 25,000 fewer baht. I tried to explain to the person on the other end that the 8:30 rate should have applied. I got cut off, tried calling back etc etc. Finally I called back later and the person I spoke with said- "we will give you a special rate." This rate turned out to be a fraction higher than the 8:30 rate so I accepted it.

Furthermore, check with the bank that is transferring your money into Thailand to be sure they understand DO NOT convert. When I first tried to do this, in spite of my explicit instructions they converted first. Once I realized the mistake, I had to recall the transfer. My bank incurred the cost of the mistake fortunately. Then, they had to do the transfer a second time. That reminds me as well of another point to be wary of. My bank wanted to charge me 2 fees to do the transfer -one for their bank and one for the thai bank. The one for the thai bank was at lot higher than what my thai bank had quoted me- thai banks charge a maximum of about 500 baht for a TT transfer. So I selected the option of paying the conversion cost at the thai end.

Remember that incoming bank transfers get a better rate already than the normal exchange rate- it's the TT buying rate (i.e. they are buying your currency-I think I accidentally said the opposite in my first post-oops) on the list of rates posted by the bank.

The moral of my long drawn-out story is that, if I had my time back, I would have checked more carefully to find out who decides (and at what time exactly) at what rate the conversion takes place. I also would have had the name and telephone number of that person.

It is also possible to open a USD account with a Thai bank and move the USD's into that account.

You can then transfer the USD's into a THB account when you want to, instantaneously at the bank.

Never allow a bank to convert into THB abroad, the rate is always piss-poor.

[Naam]

It is also possible to open a USD account with a Thai bank and move the USD's into that account.

You can then transfer the USD's into a THB account when you want to, instantaneously at the bank.

Never allow a bank to convert into THB abroad, the rate is always piss-poor.

incorrect information. i have bought several times THB cheaper in SIN and transferred to Thailand.

[bangkokburning]

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.

Genius :-)

[yoshiwara]

HKDTHB has popped over 4 so I'm rich again.

[MrRealDeal]

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.

But where are the higher returns coming from next?

The money won't go into bonds or the stock market, so it'll be left in USD's sitting there, waiting for the Bernanke to make another utterance.

We need the Chinese, the Indians and the rest of Asia to get their show together and reduce the world's dependence on the USD.

It will come from investing\manipulating the Japan markets by going short yen and long stocks because they are going to triple the money printing just as the US is slowing theirs or threatening to. So the Japan markets will increase and the yen should decrease just as the US market did over the last 3 years or so.

[MrRealDeal]

Not really because this is one of the problems with printing money,how do you get it out to the man on the street,or into the system and to the small business owner?Ben Bernanke's nickname is "Helicopter" Ben after he stated once that literally going around in a helicopter and throwing money out onto the streets would be the best way to do it!

The banks don't want to lend monies given to them as there is still a lot of risk of default on any loans,which caused the credit crunch in the first place,the sub-prime mortgage market in the US.They were lending money to a subset of people who's acronym was NINJAs,which stands for 'No job,no income or assets'!

How on earth they thought these people were going to repay the monies lent to them heaven only knows!

As for changing money,don't do it on a day when big news is out,it's like some traders don't like to trade volatile markets which makes sense as a range-trading market is much easier to make money from.

The banks do not lend out a single bit of the money that is deposited with them.

Not one single satang or cent.

They create the stuff out of nothing and dish it out, charging for it of course.

That's not exactly true , the person by virtue of getting the loan is the one who creates the new money not the bank , because the new money is just a liability to repay it and that liability rests with the borrower first. It is true however that the liability of the borrower becomes an asset for the bank when in reality it's a liability until repaid not an asset. My point is that banks don't create the new money the borrowers do.

[yoshiwara]

Not really because this is one of the problems with printing money,how do you get it out to the man on the street,or into the system and to the small business owner?Ben Bernanke's nickname is "Helicopter" Ben after he stated once that literally going around in a helicopter and throwing money out onto the streets would be the best way to do it!

The banks don't want to lend monies given to them as there is still a lot of risk of default on any loans,which caused the credit crunch in the first place,the sub-prime mortgage market in the US.They were lending money to a subset of people who's acronym was NINJAs,which stands for 'No job,no income or assets'!

How on earth they thought these people were going to repay the monies lent to them heaven only knows!

As for changing money,don't do it on a day when big news is out,it's like some traders don't like to trade volatile markets which makes sense as a range-trading market is much easier to make money from.

The banks do not lend out a single bit of the money that is deposited with them.

Not one single satang or cent.

They create the stuff out of nothing and dish it out, charging for it of course.

That's not exactly true , the person by virtue of getting the loan is the one who creates the new money not the bank , because the new money is just a liability to repay it and that liability rests with the borrower first. It is true however that the liability of the borrower becomes an asset for the bank when in reality it's a liability until repaid not an asset. My point is that banks don't create the new money the borrowers do.

New money is facilitated by the capital requirements of banks and in the first instance monies deposited with the bank.

Simple example depositor one deposits $100. $90 loaned out. Some of that money returns to the bank and we have the process known as the multiplier effect. The process does not start with the borrower. Note that vulnerability of banking rests with the depositor usually on shorter time scale than borrowers and thus why a bank run can be fatal to a bank reliant on its own resources. A simplification but holds.

[MrRealDeal]

That's just not true ALL money is loaned into existence and has been for a LONG time now.

[yoshiwara]

That's just not true ALL money is loaned into existence and has been for a LONG time now.

Not on your example it doesn't.