Baht stable this week, down slightly on external factors, BOT says

[webfact]

Baht stable this week, down slightly on external factors, BOT says
The Nation

BANGKOK: -- The baht has remained stable despite weakening a little compared with last week on external factors, the Bank of Thailand says.

BOT spokeswoman Roong Mallikamas said that between Monday and yesterday morning the currency had moved within the range of 32.56-32.73 per US dollar. Its average value is lower than last week as the US economy and its currency have strengthened.

"Many of the US economic indicators are better than expected, such as the amount of durable goods ordered and the relaxed monetary policy of the European Central Bank, which contributed to the strengthening of the US dollar. Therefore, the baht and other currencies in this region have slightly weakened when compared with the US dollar," she said.

The baht closed yesterday at 32.97 per dollar. Roong said internal factors had no effect on the currency, bond or stock markets even though foreign investors had continued to be net sellers of bonds and stocks, the amounts were not as critical as in the first day after the coup. At that time, some panicked investors sold most of their Thai assets to reduce risks.

"Most foreign investors are still waiting to see the developments of political reform and the economic stimulation process," she said.

As for domestic investors, Roong said their confidence level was still sound and they were net buyers in the stock market, which would help bring the SET Index back to the same level as before the coup.

The Stock Exchange of Thailand closed yesterday at 1,408.51, up 5.72 points from Wednesday.

Five-year credit default swaps protecting Thai government debt against non-payment fell from 133 basis points on May 22 to 122 on Wednesday, the same level as in mid-May. Roong said the drop showed that political factors had only a short-term effect on foreign investors and now they were more relaxed about the situation.


-- The Nation 2014-05-30

[chainarong]

The real rot has yet to come , this will depend on the restrictions imposed by the UN, EU, USA and other international nations, (bearing in mind that this is not like the last Coup, this Coup on the international stage is not welcome, for some reason), and the inroads the new Thai government makes towards reforms, if present indications are anything to go by, the restrictions will be pretty heavy , blanking out international news is not a very good way to start the dawn of an new era, as there are other avenues for news footage to show the international community and it also indicates the new government has something to hide , not a good look.

[harryfrompattaya]

I think all of you should be so ashamed of yourselves the Thai Baht in two years shall be 28.78 to the dollars Buy the Baht and be a positive richer pro Thai Farang

[Pib]

Roong said internal factors had no effect on the currency,...

Current events such as the military coup impact/side effects has absolutely no effect. But of course Khun Roong is correct.

[chiang mai]

Another poster in a separate thread posted this article from Bloomberg which really does show how views are divided on the future of THB:

http://www.bloomberg.com/news/2014-05-21/morgan-stanley-squares-off-against-jpmorgan-on-baht-currencies.html

FWIW I think the regional view carries more weight than the Wall Street view and I'm putting my money on that.

[Prbkk]

A modesty weaker Baht , driven by the market rather than policy, is good for the economy but an overshoot would be bad for inflation. Whichever way it goes, occupants of bar stools will have little influence over that direction, fortunately.

[chainarong]

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A modesty weaker Baht , driven by the market rather than policy, is good for the economy but an overshoot would be bad for inflation. Whichever way it goes, occupants of bar stools will have little influence over that direction, fortunately.

Beautifully put Sir.

[northernjohn]

The real rot has yet to come , this will depend on the restrictions imposed by the UN, EU, USA and other international nations, (bearing in mind that this is not like the last Coup, this Coup on the international stage is not welcome, for some reason), and the inroads the new Thai government makes towards reforms, if present indications are anything to go by, the restrictions will be pretty heavy , blanking out international news is not a very good way to start the dawn of an new era, as there are other avenues for news footage to show the international community and it also indicates the new government has something to hide , not a good look.

Well there is some truth in what you say about blocking the international news.

How ever the international news was coming from people completely unaware of the situation in Thailand. They all seemed to sit around the same room sharing stories and none of them investigating the true facts.

The foreign countries will find them selves under attack for the restrictions they place on Thailand as they have no knowledge of the events here. But the business people are right up to date and see no problems here they will put pressure on their governments to look at the reality of things here in Thailand and reevaluate their misconceptions.

[northernjohn]

Another poster in a separate thread posted this article from Bloomberg which really does show how views are divided on the future of THB:

http://www.bloomberg.com/news/2014-05-21/morgan-stanley-squares-off-against-jpmorgan-on-baht-currencies.html

FWIW I think the regional view carries more weight than the Wall Street view and I'm putting my money on that.

the article was dated May 22. that in my mind takes away any validity to it. A lot has happened since them. would be interesting to hear their views today a week after watching the events change for the betterment of Thailand.

[15Peter20]

Somehow I doubt we'll be reading any stories detailing how internal as opposed to external factors are to blame for disappointing economic or social conditions. Lap it up folks, it isn't going to get any better than this!

[Thai at Heart]

All you proreformists, just think a second, if the reforms work and Thailand becomes a model of efficiency with no corruption, the baht might rocket to 20 to the USD.

Yaay for the coup. Lol

[chiang mai]

Another poster in a separate thread posted this article from Bloomberg which really does show how views are divided on the future of THB:

http://www.bloomberg.com/news/2014-05-21/morgan-stanley-squares-off-against-jpmorgan-on-baht-currencies.html

FWIW I think the regional view carries more weight than the Wall Street view and I'm putting my money on that.

the article was dated May 22. that in my mind takes away any validity to it. A lot has happened since them. would be interesting to hear their views today a week after watching the events change for the betterment of Thailand.

I haven't seen them and I haven't looked for them, but I will guess most strongly that the regional view is equally as bullish or better.

Prove me wrong?

[RubbaJohnny]

Stable but down,Hahaha, in equestrain world a non-runner or flogging a dead horse.

Very few people understand current forex pairs let alone forecasting

Also assumes all external matters stable.,an unlikely scenario

May I humbly suggest a few extra factors slightly more relevant to bahts relative value

The staus of US T bonds

Overall health of US economy

State of Thailand's export partners Japan,China etc

World commodity prices not just rice ,oil,gold etc

Unpredictable or catastrophic events War Tsunami Serious Flooding or Earthquake calamity in Bangkok

Fukushima meltdown of Japanese economy or even a literal meltdown would hurt largest investor

Any very serious Ukraine,Ino-Paki ,Chinese conflict over Taiwan Spratleys etc

A war with Cambodia which can be initiated at the drop of a hat by either side

A Mid Easts

flare up that hikes oil etc Take tour pick Israel Leb Syria Iran Iraq etc

Plus unknowns I have not listed one of which is certain but unmentionable.(yes a penalty shoot out England loses to the.......)

Currency speculation may be ok if you are Barclays and 'set' the rules or Soros Gyorgy with bets large enough to skew markets

Edited May 30, 2014 by RubbaJohnny

[AnotherOneAmerican]

It's sinking fast.

Curfew has stopped most of the factory night shifts (33% production cut).

Rice is almost worthless.

Tourists are not going to be coming for years.

Civil war predicted likely in the next 6 months.

Most of the foreign manufacturing is looking for a way out of this country, floods, coups, curfews, rising wage casts.

The only way is down.

Edited May 30, 2014 by AnotherOneAmerican

[issanaus]

Exchange rates are based on market sentiments as well as economic fundamentals. You would have expected that the uncertainty of the Military coup would have had a significant negative impact on the value of the Baht. This has not happened because the market had previously factored in the corruption and market distortions that were a feature of the PTP government so one thing has balanced out the other.

What the market will be waiting to see is what the economic policies and budget looks like. So far it is looking very positive.

[chiang mai]

It's sinking fast.

Curfew has stopped most of the factory night shifts (33% production cut).

Rice is almost worthless.

Tourists are not going to be coming for years.

Civil war predicted likely in the next 6 months.

Most of the foreign manufacturing is looking for a way out of this country, floods, coups, curfews, rising wage casts.

The only way is down.

Your view might be credible were it not for the fact that you are negative on everything.

[chiang mai]

Stable but down,Hahaha, in equestrain world a non-runner or flogging a dead horse.

Very few people understand current forex pairs let alone forecasting

Also assumes all external matters stable.,an unlikely scenario

May I humbly suggest a few extra factors slightly more relevant to bahts relative value

The staus of US T bonds

Overall health of US economy

State of Thailand's export partners Japan,China etc

World commodity prices not just rice ,oil,gold etc

Unpredictable or catastrophic events War Tsunami Serious Flooding or Earthquake calamity in Bangkok

Fukushima meltdown of Japanese economy or even a literal meltdown would hurt largest investor

Any very serious Ukraine,Ino-Paki ,Chinese conflict over Taiwan Spratleys etc

A war with Cambodia which can be initiated at the drop of a hat by either side

A Mid Easts

flare up that hikes oil etc Take tour pick Israel Leb Syria Iran Iraq etc

Plus unknowns I have not listed one of which is certain but unmentionable.(yes a penalty shoot out England loses to the.......)

Currency speculation may be ok if you are Barclays and 'set' the rules or Soros Gyorgy with bets large enough to skew markets

You left out the possibility of an asteroid striking Bangkok, Hanoi, Tokyo and London whilst leaving nearby tourist areas unscathed, the likelihood of an ensuing plague pandemic cannot however be underrated.

Drink more, forecast less.

[AnotherOneAmerican]

It's sinking fast.

Curfew has stopped most of the factory night shifts (33% production cut).

Rice is almost worthless.

Tourists are not going to be coming for years.

Civil war predicted likely in the next 6 months.

Most of the foreign manufacturing is looking for a way out of this country, floods, coups, curfews, rising wage casts.

The only way is down.

Your view might be credible were it not for the fact that you are negative on everything.

US economy is doing well and the value of the dollar will rise against the Baht for the next few years.

Seems like a positive opinion to me!

Edited May 30, 2014 by AnotherOneAmerican

[chiang mai]

It's sinking fast.

Curfew has stopped most of the factory night shifts (33% production cut).

Rice is almost worthless.

Tourists are not going to be coming for years.

Civil war predicted likely in the next 6 months.

Most of the foreign manufacturing is looking for a way out of this country, floods, coups, curfews, rising wage casts.

The only way is down.

Your view might be credible were it not for the fact that you are negative on everything.

US economy is doing well and the value of the dollar will rise against the Baht for the next few years.

Seems like a positive opinion to me!

The US economy is doing well? Only if you call shrinkage by 1% doing well!!

http://www.nytimes.com/2014/05/30/business/economy/First-quarter-GDP-data-is-released.html?_r=0

Over and out Tommo/et al.

[swissie]

All you proreformists, just think a second, if the reforms work and Thailand becomes a model of efficiency with no corruption, the baht might rocket to 20 to the USD.

Yaay for the coup. Lol

Yep. Imagine Thailand turns into the Switzerland of SE/Asia. The Baht would likely be at 15 to the USD. This would make it impossible for a great number of Farangs to live here, depending on monthly pensions from the home country.

Hence, the more turmoil, mayhem, gloom and doom, corruption, uncertainty about future political and economic prospects, the better for the Farang.

Cheers.

[h90]

It's sinking fast.

Curfew has stopped most of the factory night shifts (33% production cut).

Rice is almost worthless.

Tourists are not going to be coming for years.

Civil war predicted likely in the next 6 months.

Most of the foreign manufacturing is looking for a way out of this country, floods, coups, curfews, rising wage casts.

The only way is down.

Your view might be credible were it not for the fact that you are negative on everything.

US economy is doing well and the value of the dollar will rise against the Baht for the next few years.

Seems like a positive opinion to me!

The European newspapers are full on how unexpected bad the US economy is doing at the moment.

[h90]

All you proreformists, just think a second, if the reforms work and Thailand becomes a model of efficiency with no corruption, the baht might rocket to 20 to the USD.

Yaay for the coup. Lol

Yep. Imagine Thailand turns into the Switzerland of SE/Asia. The Baht would likely be at 15 to the USD. This would make it impossible for a great number of Farangs to live here, depending on monthly pensions from the home country.

Hence, the more turmoil, mayhem, gloom and doom, corruption, uncertainty about future political and economic prospects, the better for the Farang.

Cheers.

But that would be compensated by the tourists that come for skiing and by the export of cheese.....If Thailand turns into the Switzerland of SEA

[khunken]

It's sinking fast.

Curfew has stopped most of the factory night shifts (33% production cut).

Rice is almost worthless.

Tourists are not going to be coming for years.

Civil war predicted likely in the next 6 months.

Most of the foreign manufacturing is looking for a way out of this country, floods, coups, curfews, rising wage casts.

The only way is down.

Your view might be credible were it not for the fact that you are negative on everything.

US economy is doing well and the value of the dollar will rise against the Baht for the next few years.

Seems like a positive opinion to me!

Your second post about the value of the dollar (with which I agree) is no attempt to justify what you said in the first one which was all negative.

What is sinking fast? The economy, the Baht, Bangkok itself?

The curfew has been adjusted to a minimal amount of time and has no effect on night shifts now.

Rice in storage may be next to worthless but the grain itself isn't.

The number of times I've heard the doomsday forecast about tourism is staggering, usually from those who don't know what they're talking about or have an axe to grind (or both).

Another crystal ball gazer about civil war. It can never be discounted but there's every chance that the army has nipped it in the bud. The possibility is far less now after the army has taken over.

All factors blocking economic progress have now been removed and the money is already starting to flow into the economy (rice repayments). Inward investment, at a standstill for the last 6 months can resume as can budget disbursements.

No, it's not near 100% rosy, but it's looking a lot better than two weeks ago.

[khunken]

It's sinking fast.

Curfew has stopped most of the factory night shifts (33% production cut).

Rice is almost worthless.

Tourists are not going to be coming for years.

Civil war predicted likely in the next 6 months.

Most of the foreign manufacturing is looking for a way out of this country, floods, coups, curfews, rising wage casts.

The only way is down.

Your view might be credible were it not for the fact that you are negative on everything.

US economy is doing well and the value of the dollar will rise against the Baht for the next few years.

Seems like a positive opinion to me!

The European newspapers are full on how unexpected bad the US economy is doing at the moment.

And they're talking out of their rear ends, not for the first time.

The just released figure for the first quarter of -1% (which may well be revised upwards) is a backward indicator. There were a number of reasons for it - 2013Q4 taking a large bite out of the 2014Q1 activity, & pretty awful weather among the main ones.

Q2 is humming along - just have a look at the US stock market indexes at record numbers. Stock markets are a forward looking barometer of the economy. One thing's for sure - the US is doing a damn site better than any of the European markets. BTW I'm an European.

[RubbaJohnny]

Stable but down,Hahaha, in equestrain world a non-runner or flogging a dead horse.

Very few people understand current forex pairs let alone forecasting

Also assumes all external matters stable.,an unlikely scenario

May I humbly suggest a few extra factors slightly more relevant to bahts relative value

The staus of US T bonds

Overall health of US economy

State of Thailand's export partners Japan,China etc

World commodity prices not just rice ,oil,gold etc

Unpredictable or catastrophic events War Tsunami Serious Flooding or Earthquake calamity in Bangkok

Fukushima meltdown of Japanese economy or even a literal meltdown would hurt largest investor

Any very serious Ukraine,Ino-Paki ,Chinese conflict over Taiwan Spratleys etc

A war with Cambodia which can be initiated at the drop of a hat by either side

A Mid Easts

flare up that hikes oil etc Take tour pick Israel Leb Syria Iran Iraq etc

Plus unknowns I have not listed one of which is certain but unmentionable.(yes a penalty shoot out England loses to the.......)

Currency speculation may be ok if you are Barclays and 'set' the rules or Soros Gyorgy with bets large enough to skew markets

You left out the possibility of an asteroid striking Bangkok, Hanoi, Tokyo and London whilst leaving nearby tourist areas unscathed, the likelihood of an ensuing plague pandemic cannot however be underrated.

Drink more, forecast less.

Excellent advice

I have printed and told my wife it is official advice to flang during period of correct thinking

[RubbaJohnny]

PS My chilled wine after lunch is going down but as you suggest is making me stable.

My quest to find free prescription for better vintages continues

[chiang mai]

[gemini81]

A modesty weaker Baht , driven by the market rather than policy, is good for the economy but an overshoot would be bad for inflation. Whichever way it goes, occupants of bar stools will have little influence over that direction, fortunately.

Sounds like one speaking from experience. Who would have thought of that unless you're cruisin' for a boozin' haha.

[carstenp]

Just being reading bloomberg news, and for me it seems like the bath is far from stable

Royal Thai Army soldiers keep watch from a military vehicle stationed outside the Royal Thai Police headquarters in central Bangkok. Global banks from Goldman Sachs Group Inc. to Morgan Stanley cut forecasts for Thailands economic growth after the nations political turmoil culminated in the military takeover. Photographer: Dario Pignatelli/Bloomberg

Thailands baht posted 2014s biggest monthly slide and bonds fell as a May 22 military coup prompted global investors to pull about $2 billion from the nations debt and stocks.

The currency slumped 1.4 percent in May to 32.820 per dollar as of 4:03 p.m. in Bangkok, the worst performance in Asia, according to data compiled by Bloomberg. It lost 0.8 percent this week. The five-year bond yield climbed seven basis points from April 30 to 3.11 percent and reached a seven-week high of 3.15 percent on May 27, data compiled by Bloomberg show.

Foreigners have been selling bonds and stocks as we still dont know when elections will be held and there remains concern about how the situation will develop, said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. That weighs on the baht and the baht may maintain a weaker bias for now.

Global banks from Goldman Sachs Group Inc. to Morgan Stanley cut forecasts for Thailands economic growth as the political turmoil culminated in the military takeover. Southeast Asias second-biggest economy shrank 0.6 percent in the first quarter as demonstrations hurt production and tourism. Goldman now predicts a 0.5 percent contraction for the whole year while Morgan Stanley sees zero growth.

Trade Numbers

Exports dropped 0.9 percent last month from a year earlier, compared with a 2.7 percent decline in March, central bank data showed today. The trade surplus narrowed to $560 million from $3.5 billion. The current account, the broadest measure of trade, slipped into deficit for the first time since October. It swung to a $643 million shortfall, from Marchs $2.9 billion excess.

Army Chief Prayuth Chan-Ocha seized power on May 22 after seven months of protests, leading to clashes that claimed 28 lives. The military government said returning the country to civilian rule soon is impossible because the threat of further violence means it cant guarantee an election would be free and fair.

The Stock Exchange of Thailand share index proved more resilient, rising 0.2 percent in May following an 11 percent gain over the previous three months.

The coup was meant to end the political unrest that led to an annulled election in February and the ouster of Prime Minister Yingluck Shinawatra three months later, according to the army. Instead, protesters have ignored martial law and returned to Bangkoks streets this week, this time to oppose the militarys takeover and call for the return of civilian rule.

One-month implied volatility in the baht, a measure of expected exchange-rate moves used to price options, fell three basis points this month to 5.53 percent. The gauge touched a one-month high of 6.81 percent on May 23.

The cost to insure the nations bonds for five-years using credit-default swaps fell two basis points in May to 120, CMA prices show. That compares with a six-month average of 135.

To contact Bloomberg News staff for this story: Yumi Teso in Bangkok at [email protected]

To contact the editors responsible for this story: James Regan at [email protected] Simon Harvey, Anil Varma

[chiang mai]

The likes of Goldmans and MS often deliberately post contrarian positions whilst investing to the obverse, I would take with a pinch of salt much of what they have to say today or at least put it in the context of what your instinct tells you.