Baht still strong ..why ?

[chiang mai]

GBP strengthens further against THB as UK jobless figure reports 7.1%, THB weakens by 30 satang but I suspect it wont last long.

So far this week (and it's only Wednesday) we've had really positive economic news out of the UK, fairly disastrous political/social unrest news out of Thailand plus a warning signal from US Fed board members that the US may well taper a further USD 10 bill. this month.

Yet THB remains where it is and keeps creeping back towards where it prefers, all apparently without intervention from BOT. Perhaps the 60 and 70 Baht per Pound brigade might want to rethink their strategies!

[onewhowalkswithbuffalo]

they're spending their money on baht which is why they cant pay the farmers

a theory worth a nomination for the Gobble Prize in Economics

At it again are we smartass

Edited January 22, 2014 by onewhowalkswithbuffalo

[onewhowalkswithbuffalo]

GBP strengthens further against THB as UK jobless figure reports 7.1%, THB weakens by 30 satang but I suspect it wont last long.

So far this week (and it's only Wednesday) we've had really positive economic news out of the UK, fairly disastrous political/social unrest news out of Thailand plus a warning signal from US Fed board members that the US may well taper a further USD 10 bill. this month.

Yet THB remains where it is and keeps creeping back towards where it prefers, all apparently without intervention from BOT. Perhaps the 60 and 70 Baht per Pound brigade might want to rethink their strategies!

The shit will hit the fan sooner or later.

[Ticker2000]

Hmmm

55 about to be breached. Mammoth hurdle technically.

It looks like it is taking another run at it.

The perfect storm appears even more perfect at present…..

[Ticker2000]

http://www.brecorder.com/top-news/1-front-top-news/154333-baht-falls-on-thai-violence-fed-tapering-views-hit-asia-fx.html

[PattayaPhom]

20% increase in less than a year and still punters moaning.

[Ticker2000]

Nearer 28% by my calcs. 43 to nearly 55. More to come me thinks. Lost 60 Sedang in 24 hours.

[fasteddie]

never going

The problem with those who are hoping the Thai Baht will fall further is Thailand has been in this situation too many times and unless there is a big run on the banks or BoT starts printing money like there is no tomorrow the Baht is not going to get much weaker.

As for the Great British Pound, thing look promising but it will take time, and do not forget we have general election in 16 months and anything can happen just imagine a UKIP/Labour coalition...

"just imagine a UKIP/Labour coalition"

Never going to happen, more lilely ukip/tory, nasty nazis together and all that!

[Thai at Heart]

The problem with those who are hoping the Thai Baht will fall further is Thailand has been in this situation too many times and unless there is a big run on the banks or BoT starts printing money like there is no tomorrow the Baht is not going to get much weaker.

As for the Great British Pound, thing look promising but it will take time, and do not forget we have general election in 16 months and anything can happen just imagine a UKIP/Labour coalition...

It's probably nonsense anyway, but if a government tried to print their way out of trouble they would devalue the currency, not strengthen it.

I reckon the best answer above is that the Thai currency is not a major trading currency so doesn't see major fluctuations like some heavily traded currencies do. Currency traders aren't interested in stable currencies that don't move.

Its about a general move away from the developing world back to the developed. The gbp has some ok news behind it recently. So away it goes

[SheungWan]

THB is a very small currency, an exotic and one that is not freely convertible, control of the currency is therefore solely in BOT and not international markets per se.

So assuming the baht is being artificially kept strong by the BOT, how sustainable is that ?

Central bank intervention is not 'artificial'.

Well its not fundamental. If central bank buys its countries currency to strengthen it. Or the Fed prints money to weaken its currency, both are artificial compared to fundamentals.

Not so. What is fundamental is the real world, as opposed to the fantasy 'fundamentals' of the gold bugs who managed to dive 28% last year. So much for that. In the financial markets those who follow 'fundamentals' as opposed to the chartists seek to factor in both macro and micro issues and central bank operations are very real for investment considerations. The vapid use of the term by those bleating on the sidelines just a sideshow of end of the world placard waving.

Edited January 22, 2014 by SheungWan

[SheungWan]

never going

The problem with those who are hoping the Thai Baht will fall further is Thailand has been in this situation too many times and unless there is a big run on the banks or BoT starts printing money like there is no tomorrow the Baht is not going to get much weaker.

As for the Great British Pound, thing look promising but it will take time, and do not forget we have general election in 16 months and anything can happen just imagine a UKIP/Labour coalition...

"just imagine a UKIP/Labour coalition"

Never going to happen, more lilely ukip/tory, nasty nazis together and all that!

The Conservative Party may have a traditional label as the 'Nasty Party', but neither they or UKIP can be described as Nazis. It devalues the term and shouldn't be used lightly..

[SheungWan]

GBP strengthens further against THB as UK jobless figure reports 7.1%, THB weakens by 30 satang but I suspect it wont last long.

So far this week (and it's only Wednesday) we've had really positive economic news out of the UK, fairly disastrous political/social unrest news out of Thailand plus a warning signal from US Fed board members that the US may well taper a further USD 10 bill. this month.

Yet THB remains where it is and keeps creeping back towards where it prefers, all apparently without intervention from BOT. Perhaps the 60 and 70 Baht per Pound brigade might want to rethink their strategies!

The shit will hit the fan sooner or later.

Check your latest edition of Nostradamus now for updated predictions 'on the money'.

[MAJIC]

I dont know about other currencies,but Yesterday UK growth for the quarter was higher than expected,that resulted in a .4 raise in the exchange rate of 54.5 Baht to 1 GBP.

[MAJIC]

It still shouldn't be sitting where it is & could be 500 points weaker.

World markets of all types hate indecision & will flee it so the present political unrest should be causing more distress in forex than it currently is in my opinion

Should be causing a lot of distress,as you say.Strangely it didn't cause much of a hiccup in 2010 either. Whatever Thailand has got going for it ,they haven't made the secret public?

[MAJIC]

THB is a very small currency, an exotic and one that is not freely convertible, control of the currency is therefore solely in BOT and not international markets per se.

And after the 97 crash,was it not linked to a basket of currencies,which included the USA Dollar,Yen,and Euro,or am I mistaken?

[MAJIC]

The problem with those who are hoping the Thai Baht will fall further is Thailand has been in this situation too many times and unless there is a big run on the banks or BoT starts printing money like there is no tomorrow the Baht is not going to get much weaker.

As for the Great British Pound, thing look promising but it will take time, and do not forget we have general election in 16 months and anything can happen just imagine a UKIP/Labour coalition...

You have got it half right,there will be a coalition,but definately not a Conservative/Liberal Dem one!

[MAJIC]

the GBP will continue to weaken as Britain advances towards becoming a banana republic. I predict that in 3 years time the GBP will be valued at 3 bananaskins and a rusty nail.

Wishful thinking!..... don't go into clairvoyance as an occupation!

[Naam]

THB is a very small currency, an exotic and one that is not freely convertible, control of the currency is therefore solely in BOT and not international markets per se.

And after the 97 crash,was it not linked to a basket of currencies,which included the USA Dollar,Yen,and Euro,or am I mistaken?

a brief glance at the chart (using USD as reference currency) shows that no link whatsoever existed.

[chiang mai]

THB is a very small currency, an exotic and one that is not freely convertible, control of the currency is therefore solely in BOT and not international markets per se.

And after the 97 crash,was it not linked to a basket of currencies,which included the USA Dollar,Yen,and Euro,or am I mistaken?

Post '97 Thailand did try to link its currency against a fixed and undisclosed trade-weighted basket of currencies, BOT then changed that and now allegedly tries to keep THB in line with regional currencies in advance of ASEAN, SGD is probably the strongest of them but its bias is heavy towards USD.

[chiang mai]

I dont know about other currencies,but Yesterday UK growth for the quarter was higher than expected,that resulted in a .4 raise in the exchange rate of 54.5 Baht to 1 GBP.

I think it was a combination of the growth figure and more importantly the sharp reduction in unemployment down to 7.1%, markets expecting perhaps that a rise in UK interest rates is even closer, that'd be a good trick hence I can't see GBP hanging on to that gain for long.

[chiang mai]

I just came across this and wanted to post it somewhere here because the author sums it up perfectly:

"Nick Beecroft, Chairman of Saxo Capital Markets UK, is “optimistic” about Britain’s recovery, but has three concerns...

1. The UK recovery is too dependent on consumer spending. Nick says that in order to feel "really" comfortable about the recovery, he would like to see growth in business investment ans well as consumer spending.

2. The pound is too strong. Nick says sterling, which is at a five year hjigh against the dollar, is getting too strong for the sake of the recovery. The Bank of England is now starting to get concerned about it too. Nick warns there could even be more strength to come, unless we see an adaptation of forward guidance.

Furthermore, as Bloomberg notes, the pound, despite all the rhetoric from the Bank of England, is now almost 2% (on a trade-weighted basis) higher than when the Bank of England said last month that further gains would endanger the economy.

3. Bank of England could lose its credibility. Nick is worried there is now a risk of credibility for BoE Governor Mark Carney. If he wants to keep rates lower but keep the threshold at 7 percent, people may start to ask what value it actually has.

The Bank of England has said it will consider increasing interest rates from the current record low of 0.5 percent when the unemployment rate falls below 7 percent".

I'm not a big fan of zerohedge but the above is spot on.

http://www.zerohedge.com/news/2014-01-22/britains-recovery-too-good-be-true

Edited January 23, 2014 by chiang mai

[Suradit69]

Bloomberg 24 January 2014

Baht Set for Weekly Decline as Protests Hurt Tourism, Economy

Thailand’s baht was headed for a weekly decline after Prime Minister Yingluck Shinawatra imposed a state of emergency in Bangkok on Jan. 22, worsening the outlook for tourism and economic growth after prolonged unrest.

The currency halted a two-day drop before a Constitutional Court ruling due today on whether an election set for Feb. 2 can be delayed amid escalating violence in the capital. The Tourism Council of Thailand estimates anti-government protests that started Oct. 31 may cost the industry 22.5 billion baht ($685 million) in this quarter. The central bank cut its 2014 growth forecast to about 3 percent this week from 4 percent, after unexpectedly holding its policy rate at 2.25 percent.

“The declaration of a state of emergency hurts tourism and the economic outlook, and that weighed on the baht,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “Thailand’s markets got some support from a potential delay in elections, but that will only have a short-term impact. The delay won’t solve any problems and Thai assets will probably go back to a weaker trend.”

http://www.bloomberg.com/news/2014-01-24/baht-set-for-weekly-decline-as-protests-hurt-tourism-economy.html?cmpid=yhoo

[chiang mai]

I'm just not sure any more what value there is in reading articles by anyone stating that THB is going to do this that or the other THIS WEEK, especially the likes of Bloomberg and Reuters who need to sell copy. Their estimates of what will happen to THB THIS WEEK are really no different from the average poster on TV, the average person believes that because there's unrest in Bangkok and now because an emergency decree has been issued, THB will weaken. Well it should if all things were equal but I'm sorry, that hasn't typically happened in Thailand in the past and analysts still don't differentiate between the effects of political turmoil and a weakening of USD and a false strengthening of GBP, all three factors are in play currently. To attribute a decline in THB, THIS WEEK, to political unrest and the emergency decree, is silly and misleading.

[qdinthailand]

What don't I understand; the title of this thread is ass-backward. The baht is weak now. Last year, it was strong when it was trading around 29 baht per USD (and similar rates for EUR and GBP).

[chiang mai]

What don't I understand; the title of this thread is ass-backward. The baht is weak now. Last year, it was strong when it was trading around 29 baht per USD (and similar rates for EUR and GBP).

Compared to what and when? THB is weaker now than it was six months ago but it's stronger than it was two years ago, it's all relative and the factors change based on which currency you are comparing against.

[chiang mai]

I just came across this and wanted to post it somewhere here because the author sums it up perfectly:

"Nick Beecroft, Chairman of Saxo Capital Markets UK, is “optimistic” about Britain’s recovery, but has three concerns...

1. The UK recovery is too dependent on consumer spending. Nick says that in order to feel "really" comfortable about the recovery, he would like to see growth in business investment ans well as consumer spending.

2. The pound is too strong. Nick says sterling, which is at a five year hjigh against the dollar, is getting too strong for the sake of the recovery. The Bank of England is now starting to get concerned about it too. Nick warns there could even be more strength to come, unless we see an adaptation of forward guidance.

Furthermore, as Bloomberg notes, the pound, despite all the rhetoric from the Bank of England, is now almost 2% (on a trade-weighted basis) higher than when the Bank of England said last month that further gains would endanger the economy.

3. Bank of England could lose its credibility. Nick is worried there is now a risk of credibility for BoE Governor Mark Carney. If he wants to keep rates lower but keep the threshold at 7 percent, people may start to ask what value it actually has.

The Bank of England has said it will consider increasing interest rates from the current record low of 0.5 percent when the unemployment rate falls below 7 percent".

I'm not a big fan of zerohedge but the above is spot on.

http://www.zerohedge.com/news/2014-01-22/britains-recovery-too-good-be-true

It looks like Carney is finally acting on point number 3 above, it'll be interesting to see what magical combination of events/stats he can come up with now to further confuse a niave public, buy more houses I say (joke)! http://www.telegraph.co.uk/finance/financetopics/davos/10593328/Mark-Carney-no-need-for-an-immediate-rate-rise.html

[onewhowalkswithbuffalo]

Bloomberg 24 January 2014

Baht Set for Weekly Decline as Protests Hurt Tourism, Economy

Thailand’s baht was headed for a weekly decline after Prime Minister Yingluck Shinawatra imposed a state of emergency in Bangkok on Jan. 22, worsening the outlook for tourism and economic growth after prolonged unrest.

The currency halted a two-day drop before a Constitutional Court ruling due today on whether an election set for Feb. 2 can be delayed amid escalating violence in the capital. The Tourism Council of Thailand estimates anti-government protests that started Oct. 31 may cost the industry 22.5 billion baht ($685 million) in this quarter. The central bank cut its 2014 growth forecast to about 3 percent this week from 4 percent, after unexpectedly holding its policy rate at 2.25 percent.

“The declaration of a state of emergency hurts tourism and the economic outlook, and that weighed on the baht,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “Thailand’s markets got some support from a potential delay in elections, but that will only have a short-term impact. The delay won’t solve any problems and Thai assets will probably go back to a weaker trend.”

http://www.bloomberg.com/news/2014-01-24/baht-set-for-weekly-decline-as-protests-hurt-tourism-economy.html?cmpid=yhoo

Bloomberg have been laying on thick with regards to emerging markets. Also a lot of talk on microsoft nowadays.

[chiang mai]

Bloomberg journo's don't distinguish between the components that comprise "emerging markets", they are not all the same.

[morrobay]

Bloomberg journo's don't distinguish between the components that comprise "emerging markets", they are not all the same.

So what are the components in Thailand,, besides conspiracy,that set it apart from other regional emerging markets. That can explain why the baht is still strong

If it is being artificially supported by the central bank. Eventually fundamentals will prevail. Also is the exchange rate/ inflation ratio in accord here ?.

[FiftyTwo]

Who are these noobs who start silly topics.

The Baht is losing value against the GBP.

Has been losing since April 2013, and is still.

Exchange rate,

Always gets worse on Friday, always rises Monday and Tuesday.

Edited February 2, 2014 by FiftyTwo