Thai Baht Likely To Appreciate To 36.50 A Us Dollar

[george]

Thai baht likely to appreciate to 36.50 a US dollar

BANGKOK: -- The Thai baht is likely to strengthen to 36.50 a US dollar due to the expected further weakening of the greenback and the appreciation of the Chinese yuan, according to an economist.

Ussara Vilaipitch of Standard Chartered Bank (Thailand) said on Tuesday that there is a room for the Thai baht to further strengthen since the US dollar tends to weaken against other main currencies, including those in Asia.

As well, the rather heating economic expansion of China has fueled concerns that Beijing may opt to raise interest rates to slow its growth.

The move would make the yuan strengthen further, she projected.

She said the weakening of the greenback and the strengthening of the Chinese yuan are key factors behind the foreign capital inflow into Asian countries, including Thailand, due to attractive returns from the currency exchange rates.

Under the circumstance, the Thai currency might appreciate to 36.5-37 baht a US dollar, she forecast.

Still, the baht has a key resistance level at 37.20, given the fact that the Bank of Thailand (BOT) has periodically intervened into the local currency movement.

The Thai baht has appreciated by 9.5 per cent since early this year, the strongest when compared with other regional currencies, including the Singapore dollar, which is up 5.6 per cent, and Japanese yen, which is up 2 per cent.

She said local entrepreneurs should closely monitor the currency exchange rates because the baht had sharply appreciated.

However, she believed that the strengthening of the Thai baht would begin to slow in the rest of the year because the central bank would try to prevent it from being too volatile.

On the BOT's 14-day repurchase rate (repo) trend, Ms. Ussara said, the central bank is less likely to raise the repo because an inflationary pressure had declined.

She viewed that the repo, which now stays at 5 per cent, is considered suitable for the country's current economic conditions.

--TNA 2006-08-22

[sonnyJ]

THB has been strenghtening against not only USD but EURO and other European currencies for a few years now, at a similar rate i guess. So does Yuan explain this all or... Sure Europe's economy is not in a great state either, but.. Can someone explain me please.

In Thailand, economists are expecting a new crash soon, right, maybe, a little? So is it just the big spending going on for years, on credit that is, having a big effect on THB? I'd like to hear your theories.

[Margo]

Actually, the baht is little changed against the euro this year, down on the pound, Swedish krona, and only 2.1 percent up on the Swiss franc, which is more closely aligned with the dollar. The factor is the weakening of the dollar, with the Thai current account surplus helping because it means more money is coming into the country than going out. JPMorgan's call on the baht for the end of the year is 37, ING Groep's estimate is 37.5. The central bank has stated it will intervene to stop volatility, which is a quite different thing than trying to stem its strength. I haven't seen any `Thai' economists predicting any crash. The economy is still trotting along on exports, which delivered the current accout surplus. Local credit has no influence at all.

[britmaveric]

Likely a crash will occur for thai economy - the only question is when??

[Heng]

I'd say there's a 99% chance it will happen within the next 80 years. I've heard crash predictions since the last one. Eventually someone will be right.

Exports are indeed as good as they have been.

[jbowman1993]

I'd say there's a 99% chance it will happen within the next 80 years. I've heard crash predictions since the last one. Eventually someone will be right.

Exports are indeed as good as they have been.

Way to go out on a limb there.

I have a prediction too. I predict that there is a 100% chance that it will rain in the next week.

[Heng]

Now you've got the gist of it.

[Ricardo]

I'd say there's a 99% chance it will happen within the next 80 years. I've heard crash predictions since the last one. Eventually someone will be right.

Exports are indeed as good as they have been.

Way to go out on a limb there.

I have a prediction too. I predict that there is a 100% chance that it will rain in the next week.

But will the rain cause the Baht to weaken, or strengthen, is what I would love to know ?

For sure, TRT and our acting caretaker PM, will not cease to strive, before all Thais (and Elite-card holders) have above-average incomes.

[eljeque]

Did you all notice how when the PM's problems started in the early part of the year, the Baht started getting stronger and stronger. It was not the supposed rush of foreign funds coming in from Singapore to buy his company, as something like 60% of that money was borrowed locally.

[cclub75]

It was not the supposed rush of foreign funds coming in from Singapore to buy his company, as something like 60% of that money was borrowed locally.

Interesting. What are your sources regarding the 60 % ?

[ilyushin]

Strategy Outlook

Despite its previous high level of appreciation earlier this year, the

Thai

bath has, surprisingly, weakened against other currencies in Asia. We

estimate the weakening baht, coupled with a rising index of more than

50

points from the lowest level in mid-July will encourage foreign

investors to

realize profits, considering yesterday's net foreign turnover dropped

to

only Bt48m, the lowest in the past two weeks.

The SET index today will move sideways downward in order to wait for

positive factors. Moreover, the Fed in Chicago commented on the

necessity

of an increase in interest rates due to inflation, and a softening of

Brent

crude oil price due to a good signal from Iran about the UN solutions.

We

recommend HOLD cash, if the index cannot close above 700 points it will

be a

negative signal.

Research and Live Stock quotes are now available on-line at:

www.seamico.com