Baht to GBP exchange worries

[FiftyTwo]

Been watching the Baht bounce up and down for the last month.

Finally bought some Baht today, XE.com stated 54.4 (mid), nearly the highest in 5 years.

So I bought some, with transfer fees, managed an overall payment of 53.3 on a 5kGBP transfer, which I though was pretty good.

While confident it will be 60 at some time this year, needed a bit of a buffer.

Was I foolish to change now, or should I have waited?

What do you think?

[olddoc]

Bangkok Bank TT rate now (today @14:09) is 53.92750 !

[i claudius]

Here is some good advice ,go into pocket,take out coin ,flip . and choose heads or tales , you might as well because all the advice you get will be worthless

[chiang mai]

Probably not a bad move, UK inflation just came in at 1.9% which is not Pound positive - the BKK stuff doesn't seem to be doing anything negative to THB and reports are that exports may surprise to the upside - reserves are actually up since 7th Feb at USD 167.6 bill.

60 before year end, methinks not!

[i claudius]

Probably not a bad move, UK inflation just came in at 1.9% which is not Pound positive - the BKK stuff doesn't seem to be doing anything negative to THB and reports are that exports may surprise to the upside - reserves are actually up since 7th Feb at USD 167.6 bill.

60 before year end, methinks not!

I think you are right about the 60 to the pound but as for the unflation rate ,i believe its skewed to make it look good ,talking to my daughter and the rest of the familly ,everything is up in price that you actually need day to day ,but when you add in tv,s furniture ,and all the other things that you dont actually need ,they have gone down ,thus bringing the inflation rate right down ,but hey who needs food gas,lecy ,water and heating oil ?

[fletchsmile]

Probably not a bad move, UK inflation just came in at 1.9% which is not Pound positive - the BKK stuff doesn't seem to be doing anything negative to THB and reports are that exports may surprise to the upside - reserves are actually up since 7th Feb at USD 167.6 bill.

60 before year end, methinks not!

I think you are right about the 60 to the pound but as for the unflation rate ,i believe its skewed to make it look good ,talking to my daughter and the rest of the familly ,everything is up in price that you actually need day to day ,but when you add in tv,s furniture ,and all the other things that you dont actually need ,they have gone down ,thus bringing the inflation rate right down ,but hey who needs food gas,lecy ,water and heating oil ?

I'd agree. I'm confident it won't hit 60 this year.

Longer term I expect GBP weakening and THB strengthening. Lots of ups and downs this year with politics and global economy, but can't see 60. More chance of 50 (or below). So reasonable move by OP to lock in some at 54-ish, especially if building a buffer.

I'd maintain people living here with their major expenditures in THB either build some THB assets or have some THB income streams

Cheers

Fletch

[olddoc]

"Longer term I expect GBP weakening and THB strengthening. "

And the evidence for that assertion is what exactly ?

The massive losses associated with rice or something more esoteric ?

[fletchsmile]

"Longer term I expect GBP weakening and THB strengthening. "

And the evidence for that assertion is what exactly ?

The massive losses associated with rice or something more esoteric ?

My own professional opinion... based on everything I know about Thailand, UK, economics, finance, central banks, research and analytical reports I receive etc etc... take it or leave it

A few questions related questions in return...

1) Do you think financial markets are forward looking, backward looking or just take each day as it comes?

2) Do you think people in financial markets haven't already factored in at least part of the political situation including the expected losses on the rice scheme, or are you suggesting no-one has thought of it so far?

3) How material do you think the loss on rice will be in terms of the countries current reserves and long term future?

{Clue: Make an assumption on how much you think the government will lose on the rice scheme based on everything you know. Then put that as a one off loss in the context of reserves/GDP etc}

Cheers

Fletch

[FiftyTwo]

Probably not a bad move, UK inflation just came in at 1.9% which is not Pound positive - the BKK stuff doesn't seem to be doing anything negative to THB and reports are that exports may surprise to the upside - reserves are actually up since 7th Feb at USD 167.6 bill.

60 before year end, methinks not!

I think you are right about the 60 to the pound but as for the unflation rate ,i believe its skewed to make it look good ,talking to my daughter and the rest of the familly ,everything is up in price that you actually need day to day ,but when you add in tv,s furniture ,and all the other things that you dont actually need ,they have gone down ,thus bringing the inflation rate right down ,but hey who needs food gas,lecy ,water and heating oil ?

I'd agree. I'm confident it won't hit 60 this year.

Longer term I expect GBP weakening and THB strengthening. Lots of ups and downs this year with politics and global economy, but can't see 60. More chance of 50 (or below). So reasonable move by OP to lock in some at 54-ish, especially if building a buffer.

I'd maintain people living here with their major expenditures in THB either build some THB assets or have some THB income streams

Cheers

Fletch

I foresee, in Thailand, the collapse of the banks, civil war and the division of the country into 2 or 3 separate nation states.

In the extreme, ethnic cleansing and a situation similar to Cambodia under Pol Pot.

Not sure if any of the current favorites will be playing Pol Pot, but at least two would like a go.

I'm trying to balance enough to live on, in the time remaining, without risking too much when we need to run.

Hoping I'm wrong and you're right.

Edited February 18, 2014 by FiftyTwo

[chiang mai]

GBP remains increasingly over valued against USD, it's being referred to as the "first out of the gate" interest rate wise but it will by no means be alone for long. And before I get accused of talking down GBP, that small matter of the deficit and record debt remains, it's simply a matter of time.

THB on the other hand, despite the Bangkok shenanigans and despite FED tapering, remains resilient and foreign currency reserves remain strong(er), strong exports and little external debt figures prominently, still.

[chiang mai]

Probably not a bad move, UK inflation just came in at 1.9% which is not Pound positive - the BKK stuff doesn't seem to be doing anything negative to THB and reports are that exports may surprise to the upside - reserves are actually up since 7th Feb at USD 167.6 bill.

60 before year end, methinks not!

I think you are right about the 60 to the pound but as for the unflation rate ,i believe its skewed to make it look good ,talking to my daughter and the rest of the familly ,everything is up in price that you actually need day to day ,but when you add in tv,s furniture ,and all the other things that you dont actually need ,they have gone down ,thus bringing the inflation rate right down ,but hey who needs food gas,lecy ,water and heating oil ?

I'd agree. I'm confident it won't hit 60 this year.

Longer term I expect GBP weakening and THB strengthening. Lots of ups and downs this year with politics and global economy, but can't see 60. More chance of 50 (or below). So reasonable move by OP to lock in some at 54-ish, especially if building a buffer.

I'd maintain people living here with their major expenditures in THB either build some THB assets or have some THB income streams

Cheers

Fletch

I foresee, in Thailand, the collapse of the banks, civil war and the division of the country into 2 or 3 separate nation states. In the extreme, ethnic cleansing and a situation similar to Cambodia under Pol Pot.

Not sure if any of the current favorites will be playing Pol Pot, but at least two would like a go.

I'm trying to balance enough to live on, in the time remaining, without risking too much when we need to run.

Hoping I'm wrong and you're right.

Why would the banks collapse, what is the catalyst for that, NPL's at the majors remain very small and profits are at an all time high?

[olddoc]

"My own professional opinion... based on everything I know about Thailand, UK, economics, finance, central banks, research and analytical reports I receive etc etc..." (sic)

​I am massively impressed by the "professionals" who failed to see or predict the sub prime crisis and the collapse of big banks !

​Any financial advice which is alleged to originate from a "professional" should be treated with the utmost caution if not downright contempt.

[Pib]

"My own professional opinion... based on everything I know about Thailand, UK, economics, finance, central banks, research and analytical reports I receive etc etc..." (sic)

​I am massively impressed by the "professionals" who failed to see or predict the sub prime crisis and the collapse of big banks !

​Any financial advice which is alleged to originate from a "professional" should be treated with the utmost caution if not downright contempt.

But those professionals did notice the financial crisis out of the corner of their eye as it went by them.

[modafinil]

I foresee, in Thailand, the collapse of the banks, civil war and the division of the country into 2 or 3 separate nation states.

In the extreme, ethnic cleansing and a situation similar to Cambodia under Pol Pot.

Not sure if any of the current favorites will be playing Pol Pot, but at least two would like a go.

I'm trying to balance enough to live on, in the time remaining, without risking too much when we need to run.

Hoping I'm wrong and you're right.

This is amazing, FiftyTwo! Do you have what is known as "the gift"?

As soon as I saw your post, a strange pulse of energy shot through my body - when I saw your username, I was astonished!

• In the rosary of the seven pains of the Virgin Mary, the prayer of the Ave Maria is told 52 times.

• The ancient Mexicans divided the time in periods of 52 years, waiting the end of the world to the term of each of they. It is the number of the Aztec century, 13 x 4, called the small cycle. We find it in the ligature of the years for the duration of the suns, in particular the first and the fourth sun, which have a duration of 676 years, are considered as being the most perfect since they contain only the two numbers 13 and 52 whose product gives 676.

• One of the Mexican games, named the patolli, kind of game of Goose, has a diagram which is a cross divided into 52 boxes, figuring the number of years of the divinatory cycle and solar.

• The 52 treaties of Nag Hammadi (texts or sacred writings) discovered on 1945 in the village of the High Egypt, hidden in a cave dug in the mountain of the "Djebel el Tarif". The place is called Nag Hammadi.

I know - incredible, isn't it?

[fletchsmile]

"My own professional opinion... based on everything I know about Thailand, UK, economics, finance, central banks, research and analytical reports I receive etc etc..." (sic)

​I am massively impressed by the "professionals" who failed to see or predict the sub prime crisis and the collapse of big banks !

​Any financial advice which is alleged to originate from a "professional" should be treated with the utmost caution if not downright contempt.

I guess the questions I asked in return were just a little too difficult for you....

Also you might want to think about the difference between advice and opinion as a further question

[Billmont]

UK interest rates have only one way to go and that is up and that will strengthen the pound in the long term. The pound should not be under estimated as the economy is also improving. It is difficult to predict how the Baht will react over the next 12 months because the political situation will not be resolved any time soon. in the meantime the ROE between GBP and THB will fluctuate so be ready to act when the rate is favourable. I recently changed at 54.27 by TT. I am now looking for the next high even though I have many months reserve after my last change.

[gamini]

Probably not a bad move, UK inflation just came in at 1.9% which is not Pound positive - the BKK stuff doesn't seem to be doing anything negative to THB and reports are that exports may surprise to the upside - reserves are actually up since 7th Feb at USD 167.6 bill.

60 before year end, methinks not!

I think you are right about the 60 to the pound but as for the unflation rate ,i believe its skewed to make it look good ,talking to my daughter and the rest of the familly ,everything is up in price that you actually need day to day ,but when you add in tv,s furniture ,and all the other things that you dont actually need ,they have gone down ,thus bringing the inflation rate right down ,but hey who needs food gas,lecy ,water and heating oil ?

I'd agree. I'm confident it won't hit 60 this year.

Longer term I expect GBP weakening and THB strengthening. Lots of ups and downs this year with politics and global economy, but can't see 60. More chance of 50 (or below). So reasonable move by OP to lock in some at 54-ish, especially if building a buffer.

I'd maintain people living here with their major expenditures in THB either build some THB assets or have some THB income streams

Cheers

Fletch

Thai shares look attractuve. Hosptals are chock a bloc with foreign customers. maybe a good buy. I bought Bumrungrad at 30 sometime back now they are 90BT

[chiang mai]

"My own professional opinion... based on everything I know about Thailand, UK, economics, finance, central banks, research and analytical reports I receive etc etc..." (sic)

​I am massively impressed by the "professionals" who failed to see or predict the sub prime crisis and the collapse of big banks !

​Any financial advice which is alleged to originate from a "professional" should be treated with the utmost caution if not downright contempt.

I guess the questions I asked in return were just a little too difficult for you....

Also you might want to think about the difference between advice and opinion as a further question

+1

[chiang mai]

"My own professional opinion... based on everything I know about Thailand, UK, economics, finance, central banks, research and analytical reports I receive etc etc..." (sic)

​I am massively impressed by the "professionals" who failed to see or predict the sub prime crisis and the collapse of big banks !

​Any financial advice which is alleged to originate from a "professional" should be treated with the utmost caution if not downright contempt.

The OP asked for opinions which were duly given, no need to be derogatory as a result, if you don't understand the subject matter and/or context, perhaps better to observe rather than comment!

[MAJIC]

I foresee, in Thailand, the collapse of the banks, civil war and the division of the country into 2 or 3 separate nation states.

In the extreme, ethnic cleansing and a situation similar to Cambodia under Pol Pot.

Not sure if any of the current favorites will be playing Pol Pot, but at least two would like a go.

I'm trying to balance enough to live on, in the time remaining, without risking too much when we need to run.

Hoping I'm wrong and you're right.

This is amazing, FiftyTwo! Do you have what is known as "the gift"?

As soon as I saw your post, a strange pulse of energy shot through my body - when I saw your username, I was astonished!

• In the rosary of the seven pains of the Virgin Mary, the prayer of the Ave Maria is told 52 times.

• The ancient Mexicans divided the time in periods of 52 years, waiting the end of the world to the term of each of they. It is the number of the Aztec century, 13 x 4, called the small cycle. We find it in the ligature of the years for the duration of the suns, in particular the first and the fourth sun, which have a duration of 676 years, are considered as being the most perfect since they contain only the two numbers 13 and 52 whose product gives 676.

• One of the Mexican games, named the patolli, kind of game of Goose, has a diagram which is a cross divided into 52 boxes, figuring the number of years of the divinatory cycle and solar.

• The 52 treaties of Nag Hammadi (texts or sacred writings) discovered on 1945 in the village of the High Egypt, hidden in a cave dug in the mountain of the "Djebel el Tarif". The place is called Nag Hammadi.

I know - incredible, isn't it?

And it's 52 minutes past my bedtime, Goodnight!

[chiang mai]

UK interest rates have only one way to go and that is up and that will strengthen the pound in the long term. The pound should not be under estimated as the economy is also improving. It is difficult to predict how the Baht will react over the next 12 months because the political situation will not be resolved any time soon. in the meantime the ROE between GBP and THB will fluctuate so be ready to act when the rate is favourable. I recently changed at 54.27 by TT. I am now looking for the next high even though I have many months reserve after my last change.

You are correct, the Pound is very strong currently and its strength has surprised most people - you are also correct that UK interest rates can sensibly only go in one direction, that's because they are already very close to rock bottom hence the only way is up. But some questions for you to consider:

Given that the Pound is unusually strong, how helpful will it be for the recovery/exports/deficit if it becomes even stronger?

The recovery at present is built almost entirely on consumer spending, how will increased rates impact that?

Europe is the UK's major trading partner and it is currently threatened by deflation, will that not potentially have a negative impact on UK economics and the Pound?

[phutoie2]

Some economists will disagree with comment about consumer spending. Both construction and engineering are doing well. Recent article about Bombardier ordering new trains to be built in Derby for the London project.

With all the repair work for houses after the flooding, might have to look at builder merchants investment too.

[chiang mai]

Some economists will disagree with comment about consumer spending. Both construction and engineering are doing well. Recent article about Bombardier ordering new trains to be built in Derby for the London project.

With all the repair work for houses after the flooding, might have to look at builder merchants investment too.

I don't know how useful these are but I couldn't find a single report that talked about anything else on the subject of UK economic recovery:

"Economic growth in the UK was driven by consumer spending in the third quarter of the year, Office for National Statistics (ONS) figures show.

The ONS kept its estimate for economic growth in the quarter at 0.8%, which is the fastest pace for three years.

Consumer spending, which accounts for nearly two-thirds of the UK's economic activity, also rose by 0.8%, the most since the second quarter of 2010.

Business investment also grew, but exports fell in the quarter". http://www.bbc.co.uk/news/business-25118514

"ALTHOUGH Britain's economic recovery appears to be well underway, its sustainability has been called into question after data showed the recovery was driven by consumer spending, rather than trade and investment.

The Office for National Statistics (ONS) confirmed that in the second quarter the economy grew by 0.7 per cent and the first quarter's growth was upgraded from 0.3 per cent to 0.4 per cent". http://www.theweek.co.uk/business/55342/britains-recovery-propped-consumer-spending

"The U.K. economy will grow faster than previously forecast as rising house prices support consumer spending, the National Institute of Economic and Social Research said in a report today.

Gross domestic product will expand 2.5 percent this year, more than the 2 percent the London-based group forecast in November. The unemployment rate will reach the 7 percent threshold for the Bank of England to consider an interest-rate increase in early 2014, it said, revising an earlier assessment there there was a one-in-five chance of that happening in the first quarter.

“We expect consumer spending to remain the key driver of the recovery in 2014 and 2015, supported by continued buoyancy in the housing market,” Niesr said. “The U.K.’s economic recovery has become entrenched.” http://www.bloomberg.com/news/2014-02-07/u-k-outlook-raised-by-niesr-as-consumer-spending-lifts-growth.html

So if those things are true, any increase in interest rates will dampen consumer spending, ergo a stronger Pound is unlikely.

Edited February 19, 2014 by chiang mai

[MrWorldwide]

Here is some good advice ,go into pocket,take out coin ,flip . and choose heads or tales , you might as well because all the advice you get will be worthless

Sadly, I concur. When the so-called expert economists can't seem to get forecasts right, what hope the population of TV ?

[chiang mai]

A forecast has a life expectancy of thirty seconds after it was made and no more, regardless of who made it and for what purpose. Were everything in life to remain static for longer then the useable life of a forecast would increase proportionately, thankfully however the world and life don't work that way.

[Billmont]

UK interest rates have only one way to go and that is up and that will strengthen the pound in the long term. The pound should not be under estimated as the economy is also improving. It is difficult to predict how the Baht will react over the next 12 months because the political situation will not be resolved any time soon. in the meantime the ROE between GBP and THB will fluctuate so be ready to act when the rate is favourable. I recently changed at 54.27 by TT. I am now looking for the next high even though I have many months reserve after my last change.

You are correct, the Pound is very strong currently and its strength has surprised most people - you are also correct that UK interest rates can sensibly only go in one direction, that's because they are already very close to rock bottom hence the only way is up. But some questions for you to consider:

Given that the Pound is unusually strong, how helpful will it be for the recovery/exports/deficit if it becomes even stronger?

The recovery at present is built almost entirely on consumer spending, how will increased rates impact that?

Europe is the UK's major trading partner and it is currently threatened by deflation, will that not potentially have a negative impact on UK economics and the Pound?

******

Billmont

There are many arguements for and against a stronger pound, it mainly depends on which side of the coin you prefer! There is no doubt that interest rates are a major factor and an increase is seen much closer when trigger points are reached for such items as as unemployment and inflation. Recently the Bank of England had to react and make a statement that reaching these trigger points will not necessarily cause an rate increase. This was necessary to dampen Sterlings rise in anticipation of a rate increase. Due to the poor state of the EEC the UK had to look elsewhere to sell and in this they have been quite successful, the BRIC countries for e.g. but the EEC is still very important. Higher interest rates will not necessarily dampen consumer spending, housing takes on a life of its own and consumer spending was much higher when interest rates were sky high. When a currency is strong and exports become expensive manufacturers look at ways to reduce costs and become more efficient so it is not all bad news. However in the end the strength of a currency depends on the the strength or weakness of of other majors and impossible to determine with any near accuracy even by so called experts, even those here on TV. I revert to my original post and repeat that timing a trade can make a significant difference as currencies fluctuate. I always try to have a good reserve of both THB and GBP here in Thailand and when I spot a good rate I change even if I do not need additional THB at that time but for sure I will in the future.

Edited February 19, 2014 by Billmont

[PattayaPhom]

I notice the BOE made a statement yesterday that their hands are tied and nothing they can do to curb property price increases. Previously interest rate rises were one of the main tools to use. Obviously at present they have no intention of raising rates which should be worrying for residents of the UK as property is now out of reach for the majority. Average house price, 250,000 average salary 25,000...not sustainable even with an influx of immigrants each year making net immigration 2013 of almost 200,000. Carney seems to be a better choice than that fossil Mervyn King and is not shy of taking adverse emergency measures which could have an effect to either weaken or benefit Sterling. We have noticed a number of UK citizens that have rented for the past few years now taking advantage of higher Sterling and purchasing.

[chiang mai]

If they wanted to curb house prices, they could, trouble is they don't want to. How's about raising Stamp Duty by thirty per cent or imposing a capital gains tax TODAY where the property is held by an overseas buyer or is held by anyone else for less than a specific period! There's loads of ways to cool the market but nobody in government or the BOE wants that, elections are not that far away, remember.

Edited February 19, 2014 by chiang mai

[RAZZELL]

£ up against the baht

I think when dealers see people getting a bullet in the head in a country's capital on their screens, it somewhat colours their opinion - and thus "economic indicators" go out the window - and the biggest economic driver of them all takes over - "fear"

RAZZ

Edited February 19, 2014 by RAZZELL

[chiang mai]

I don't think so, I'm pretty certain what happens is, the longer it all drags on, the greater the impact is on GDP and the economy and that's why THB weakens, in that context it doesn't really matter that people are getting shot, it's all about time and not the number of deaths.