Who is Playing Games with the Baht

[silent]

I am a Canadian and our dollar is tanking vs the American buck. Our country is in much better financial shape than theirs soo I go with the manipulation theory

It beats understanding.

Not really hard understanding the lack of trading confidence with the still wannabe Beatle Prime Minister there and the fix or repair daily (Ford) Mayor in Toronto.

[boatguy]

Are the supercomputers involved in some of these currency exchanges,....betting on tiny changes in fractions of seconds ??

http://www.cbsnews.com/news/how-speed-traders-are-changing-wall-street-07-10-2010/

"What Narang and other high frequency traders tell their computers to do is to make a profit of a penny or less, 40 million times day.

They scan the different exchanges, trying to anticipate which direction individual stocks are likely to move in the next fraction of a second based on current market conditions and statistical analysis of past performance. But the computers have no real understanding of who these companies are and what they do."

Edited January 15, 2014 by boatguy

[boatguy]

And while we are at it, can someone here justify the differences in the 'buy' and 'sell' rates these banks utilize??

It seems to me that they (the banks) are collecting something like 1% of your money on these transactions,...in a single day!! I can't get 1% on my savings accounts from these banks in one full year !!

[chiang mai]

And while we are at it, can someone here justify the differences in the 'buy' and 'sell' rates these banks utilize??

It seems to me that they (the banks) are collecting something like 1% of your money on these transactions,...in a single day!! I can't get 1% on my savings accounts from these banks in one full year !!

At Thai banks the spread is typically 30 satang above/below the midpoint, extremely good value, the spread at Western banks is far higher and is typically a rip off.

[Jasun]

All the baht seems to need is certainty or closure, and it can arrive in funny forms: a military coup (baht went up), court case finishes and parliament is thrown out (baht went up), violent crack down ending a long protest (baht went up). Not sure what the certainty is in the current crisis. Certain that things will get worse?

[boatguy]

Am I missing something, or are the videos from 60 minutes 'blocked' in Thailand ?? (I got that message on one site where I tried to play the video)

[Gsxrnz]

I like to know where those idiots are who projected that the baht would fall. They are very silent now. Never trust a online FX.

Money can't be made if the market is stable.

Lord, let us pray for a falling/rising/falling/rising/falling/rising ad infinitum baht/dollar/pound etc....at least until the cows come home and all those pips find their way to my bank account.

[chiang mai]

60 Minutes videos, in Thailand

Try this: http://www.youtube.com/user/60minutes

[boatguy]

At Thai banks the spread is typically 30 satang above/below the midpoint, extremely good value, the spread at Western banks is far higher and is typically a rip off.

What is a 'satang' ?

When I exchanged some US dollars for Thai baht a few days ago the spread was 32.62 verses 33.26. That appears to me to be a difference of 0.64,...or about 2%

[chiang mai]

At Thai banks the spread is typically 30 satang above/below the midpoint, extremely good value, the spread at Western banks is far higher and is typically a rip off.

What is a 'satang' ?

When I exchanged some US dollars for Thai baht a few days ago the spread was 32.62 verses 33.26. That appears to me to be a difference of 0.64,...or about 2%

Ummm, a satang is the Thai equivalent of a cent!

The spread needs to be calculated against the midpoint, not against its opposite transaction. Perhaps worth you comparing the cost of your conversion here against the cost in your home country?

[Gsxrnz]

At Thai banks the spread is typically 30 satang above/below the midpoint, extremely good value, the spread at Western banks is far higher and is typically a rip off.

What is a 'satang' ?

When I exchanged some US dollars for Thai baht a few days ago the spread was 32.62 verses 33.26. That appears to me to be a difference of 0.64,...or about 2%

Those nasty old banks!! How dare they buy something from you so they can sell it to somebody else and make a profit on the deal. It's just not cricket!

[Loles]

There is not game.

Just remember to 2010.

street war situation, buildings in flames, 96 people died .... and the THB got stronger month by month.

[Joe Mamma]

I am a Canadian and our dollar is tanking vs the American buck. Our country is in much better financial shape than theirs soo I go with the manipulation theory

Canada needs to ramp up it's money printing presses. Look at the wood at hand for the task.

[RubbaJohnny]

Current turmoil plus a bit of clashes have been priced in already. For a sudden decline you need a coup or some such.

An interesting assertion,while satbility may will cause a correction if you chart previous 18 military coups they didn't all cause depreciation.

As other knowlegeable posters have noted forex is pairs of traded paper.

Therefore the counterpartys health prospects are also relevant plus any sentiment barriers.

For instance RMB the housing bubble may not affect the baht until the kwai is truly convertible the recent dimsum bond take up in London were swift but minute compared to the Dollars needed for fuel purchase

Despite all the happenings here the baht has remained fairly stable c29-30 relative to the Aussie and Loony as each of these have reacted to QE tapering sentiment.

Forex is so complex even the pros get it wrong

Corruption and speculation happen everywhere,I leave it to you experts to wonder whether any sleazier here.

http://www.huffingtonpost.com/andrew-verstein/untangling-the-libor-and-_b_4284199.html

Regulators in the United States, Hong Kong, Singapore, the United Kingdom, Switzerland and elsewhere are investigating potential manipulation of the market for foreign currency, sometimes called FX or foreign exchange. It is natural to compare these reports to the manipulation of Libor, the London Interbank Offered Rate.

After all, both Libor and the leading FX benchmarks are massively influenced by the actions of a few international banks. Investigations into both have exhumed embarrassing online chat sessions: FX traders met in chat rooms called The Bandit's Club and The Cartel, while Libor traders promised bottles of Bollinger Champagne. And both markets are massively important: there are $5 trillion in FX trades daily, while Libor gets about halfway there ($2.5 trillion) with one product alone.

A few minutes research will show countless examples worldwide,you don't need a crystal ball when you can read the book.

Thai fundamentals low cost labour and sunny beaches lined with rubber teak palm oil and real oil look good,conservative lending few NPLThai taxpayers do not have to pay 16trillion debt, endless foreign wars nor subsidies to EU farmers. Rice subsidy however inefficient as income support does stay within the same economy,there is no external bleed like UK payments to the unaudited EU.

Internal transfers are arguments about who will get a few more crumbs from the top table and as usual if the yelping gets too much the hounds are slapped down for a while.

The key influence for all oil importers demoninated for now in US $ is the Fed taper and how the world's largest economy rations its debt and monetises its problems offshore

Edited January 15, 2014 by RubbaJohnny

[RubbaJohnny]

As someone who luckily imported sterling over 72 the 19 september 2006 coup date had zero impact on baht rates see chart below

Sep 01

71.4685

Sep 02

71.4685

Sep 03

71.4685

Sep 04

71.4685

Sep 05

70.6564

Sep 06

70.3965

Sep 07

70.0402

Sep 08

69.8441

Sep 09

69.8441

Sep 10

69.8441

Sep 11

69.9227

Sep 12

70.1791

Sep 13

70.0928

Sep 14

70.4026

Sep 15

69.9996

Sep 16

69.9996

Sep 17

69.9996

Sep 18

70.1148

Sep 19

71.0819

Sep 20

71.1676

Sep 21

71.1933

Sep 22

70.9749

Sep 23

70.9749

Sep 24

70.9749

Sep 25

71.2493

Sep 26

71.0249

Sep 27

70.8605

Sep 28

70.4216

Sep 29

70.253

Sep 30

70.253

[wprime]

The problems themselves don't cause the baht to go down, it's the fear that PTP will be ousted that will cause it to go down but the foreign media is under-representing this possibility.

[RubbaJohnny]

Also professional traders will "hedge" trying to build in /offset risks

Despite wide screams of failed state and different approach to law enforcement the blood on the streets the justice or injustice of any players don't fundamentally alter the underlyoing value to be had here.

You will know its gone TITS up when canoes of hi-sos and wealthy expats are paddling past the Royhingya towards the "safety" of Burma Indosnezia or Bumychummy submission in institutionally racist Melayu

[SheungWan]

The problems themselves don't cause the baht to go down, it's the fear that PTP will be ousted that will cause it to go down but the foreign media is under-representing this possibility.

;er no. The FX market has no particular affinity for the PTP or its retention, but could be a story for Red TV to flog with all the other nonsense.

[harber8]

It does seem strange that it got stronger on Monday (shutdown day) but as the saying goes. When blood hits the street....INVEST!!

[boatguy]

The spread needs to be calculated against the midpoint, not against its opposite transaction. Perhaps worth you comparing the cost of your conversion here against the cost in your home country?

Why the midpoint? Isn't the buying and selling prices they are quoting the figures they use in their transaction? They buy dollars from you at 32.62, and they sell dollars at 33.26 in this particular case....a 2% gain . or even if it was half that, 1%, that's a pretty good deal for a single days transaction,...to make 1% on your money.

I realize that banks need to make money, but I do find in this day and age, when converting foreign currencies is so much easier for them to facilitate, that maintaining these 'old methods/pricing' is a bit of a rip off.

[RubbaJohnny]

It does seem strange that it got stronger on Monday (shutdown day) but as the saying goes. When blood hits the street....INVEST!!

Only strange to those who do not comprehend that fre markets while noting local disputes look at other factors.

The very small level of violence onMonday may have helped.

I am not saying you are wrong rather there is a hidden hand,nothing occult or conspiratorial at all.

A gulf war,Large change in US Exchanges or Energy finds,ratioing will have more marked effects on baht than a few molotov cocktails.

While sadly some small businesse will suffer and family tourist be deterred there seems to be an insatiable appetite for Pattaya and Phuket.Tourism while vital to small sectors of family businesses is of little concern to the big players hereabouts and however expensive your condo or 30million dollar villa we are dross on the floss.

[khunPer]

Ups – sorry folks – may be all the money I just moved in to invest in underpriced Thai stocks...!

[Naam]

At Thai banks the spread is typically 30 satang above/below the midpoint, extremely good value, the spread at Western banks is far higher and is typically a rip off.

What is a 'satang' ?

When I exchanged some US dollars for Thai baht a few days ago the spread was 32.62 verses 33.26. That appears to me to be a difference of 0.64,...or about 2%

Ummm, a satang is the Thai equivalent of a cent!

The spread needs to be calculated against the midpoint, not against its opposite transaction. Perhaps worth you comparing the cost of your conversion here against the cost in your home country?

-the spread is the difference between bid and ask. any "midpoint" is nothing but a fictitious calculation result and used to depict currency movements and make comparisons easier.

-this spread expressed in Satang differs depending on the currency exchanged and whether it is cash or transfer.

-the cost of conversion in our home countries (and any country) depends on the availability and the bank's trading frequency of a currency. for exotic and/or restricted currencies the cost can be extremely high. a rule of thumb does not exist.

-example: a Swiss bank in Singapore will offer a much better rate for Thai Baht vs. a major currency such as USD, GBP, €UR or JP¥ than the same Swiss bank in Zürich or Geneva.

summary: midpoints and home country conversions are as irrelevant as the fertility of a nun who has sworn eternal celibacy.

[Naam]

The spread needs to be calculated against the midpoint, not against its opposite transaction. Perhaps worth you comparing the cost of your conversion here against the cost in your home country?

Why the midpoint? Isn't the buying and selling prices they are quoting the figures they use in their transaction? They buy dollars from you at 32.62, and they sell dollars at 33.26 in this particular case....a 2% gain . or even if it was half that, 1%, that's a pretty good deal for a single days transaction,...to make 1% on your money.

I realize that banks need to make money, but I do find in this day and age, when converting foreign currencies is so much easier for them to facilitate, that maintaining these 'old methods/pricing' is a bit of a rip off.

-except in the minds of certain posters "midpoints" are not used as a basis for currency or any other transactions.

-no merchant calculates any of his cost from any "midpoint". he uses purchase price and sales price. the same applies to a Thai rice farmer who has costs for labour, fertiliser and amongst others perhaps for financing. he deducts these costs from the sales price to arrive at the money he made. of course there's always the possibility to discuss with his wife the "rice production midpoint cost" when the electricity is down and the wife is bored because she can't watch a soap opera

-as far as "rip-offs" are concerned... you exchanged physical dollars which are rather cost intensive to handle. if you think that your transaction provided a 2% gain for the bank please think again. how many dollars did you exchange? let's say 500? how long did the teller take to verify that your dollar bills were not fake? how long did it take for the teller to count and hand out the Baht? what other procedures were left for the bank to handle your Dollars. will they be just kept in a drawer?

[chiang mai]

The OP complains about the profit made on currency transactions by a bank:

the profit on a currency transaction can be measured as the amount of money a bank will receive from the sale of a currency item less the cost to acquire it - it should be noted that there are two phases to a transaction, a buy phase and a sell phase.

If a bank acquires currency but does not sell it, i.e. does not maximize potential profit, the value of the profit on that currency transaction is halved, the bank only realizes 50% of potential profit, in order to realize the full profit potential it must perform a second transaction by selling the currency on. In the context of measuring profit, which is the subject under discussion, the midpoint serves a useful purpose. To carry the example one stage further: if the bank never sells the currency onwards it will be recorded as an asset on its books, at a price that is equal to the spot or midpoint value, not at any future selling price.

[paz]

It will cost because to buy your own currency you need to deplete usd of other major currency reserves that you can't print.

Sent from my GT-I9070 using Tapatalk

[Puccini]

Am I missing something, or are the videos from 60 minutes 'blocked' in Thailand ?? (I got that message on one site where I tried to play the video)

What is "60 minutes"?

[Puccini]

To reinforce the above point that underlying business is booming:

There's a piece in the Bangkok Post online that talks about NPL's and how the banks are increasing their loss reserves. Before NS gets too excited on this point it's worth noting that whilst the reserves are indeed increasing, it is estimated that as a result, profit from the nine banks will be down 9% quarter-on-quarter but up 50% year-on-year. Overall NPL's remain under 3%.

In the context of your post,

• what is NPL?
• what is NS?

[chiang mai]

To reinforce the above point that underlying business is booming:

There's a piece in the Bangkok Post online that talks about NPL's and how the banks are increasing their loss reserves. Before NS gets too excited on this point it's worth noting that whilst the reserves are indeed increasing, it is estimated that as a result, profit from the nine banks will be down 9% quarter-on-quarter but up 50% year-on-year. Overall NPL's remain under 3%.

In the context of your post,

• what is NPL?
• what is NS?

NPL = non-performing loans or loans where the customer has not repaid the loan as planned.

NS = a Thaivisa poster renowned for knocking Thailand and insinuating that everyone here will loose all their money..

[Flemish guy]

The euro won 10 % up to the baht, compared with october last year...