FT Comment on THB - The World's Worst Performing Currency

[AyG]

There's an article in the FT today "Asian currencies tripped up by global bond rout".

It includes the following observations on the baht:

"Just in time for the summer holidays, the price of an ice-cold Thai beer is tumbling.

"Over the past month, the baht has fallen 3.4 per cent against the US dollar and 8.7 per cent against the euro, making it the world’s worst performing currency. At 33.5 per dollar it is now trading at levels last seen during the financial crisis in 2009."

Worth a read.

http://www.ft.com/cms/s/0/f67f18fa-fd0b-11e4-800d-00144feabdc0.html

(Google the article name if you can't see it using the link.)

[lopburi3]

Actually that decline is by design so appears to be exactly what the government has been trying to do with there interest rate cut.

As for that link; no thanks - enough splash screens to kill and once through them you have to register to read anything.

The Google option leads to a survey question/answer session or registration to read anything.

[toss]

I went through the same route as you Lopburi3 but then Googled "Thai Baht Tripped"

and then clicked on the heading "Asian currencies tripped....."

(The 5th heading on the page, and it worked)!?!

Edited May 18, 2015 by toss

[TPI]

Isn't this what the NCPO wanted? The THB has been overvalued for over a year now and it has made it impossible for the government to trade in commodities in a competitive way! Roll on, roll on I say!Let's see the Ozy dollar trade around 30:1!

[johnopolo]

I haven't read the article but the statement "the world’s worst performing currency" is absurd. Go read this (there are also many other authoritative sites).

[MobileContent]

I thought the Ruble was the worse currency.

I wished the Baht would tank to 40 Baht a Euro as I am next month of for my one year visa and a month holiday in Berlin, Paris and London.

Guess it's time to buy some Euros.

[AyG]

I haven't read the article but the statement "the world’s worst performing currency" is absurd. Go read this (there are also many other authoritative sites).

Some might say that commenting without reading the article is also absurd. In context the quotation is 100% accurate.

[SiSePuede419]

"Global bond rout"

555. Insane.

Rout

defeat and cause to retreat in disorder

A piddling 3+% decline is neither defeat nor disorder.

The value of EXISTING bonds only go up, if interest rates decline.

Since rates are near zero, there's nowhere to go but up. You could see this coming for years now.

Whoop di doo. No more free money. Boo hoo hoo.

Only an absolute idiot would think this is the end of the world...

[Robert24]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

[bazza40]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

[AyG]

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

Simply not true as this chart shows: http://www.xe.com/currencycharts/?from=USD&to=THB&view=10Y

[Tywais]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

The baht was floated (removed from US peg) in July 1997 during the crisis that tumbled through out SEA, Thailand leading the way. They used up most of their reserves trying to defend it but couldn't and part of the agreement with the IMF was to change to a basket of currencies.

[TheAppletons]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

False.

[Robert24]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

no peg to the $ since 1998.

[Srikcir]

A falling baht is fine if the GDP growth rate increases proportionally. But should the GDP remain stagnant or only slightly increase (<0.5%), Thailand goes into deflation that begins to impact the domestic economy due to spiraling cost of production and lack of investment capital. Venzuela is a classic example. There are no current Junta policies that would reverse the slide in GDP growth until maybe 2016.

[Farang99]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

50 years ago the Thai baht was pegged at 25 to the US$ and 40 to the GB£. This worked when these currencies were relatively stable, but with the world financial markets in disarray it was no longer appropriate, and they now stand wherever the market will let them.

[shaurene]

Ok let's look at the 2 currency's mentioned. For a start the Thai baht did not weaken the US$ has strengthened over all currency's The Euro crashed mainly because of the Greek problem and helped by the problems with Portugal, Italy, France and Spain. Over the last couple of weeks the Greek situation was starting to look like a deal could be struck and the Euro strengthened a lot. As soon as Greece is sorted out you will see the Euro rise a lot. 3 months ago I bought from Super Rich 1.000,000 Baht worth of Euro I sold it back on Monday morning and made 20,000 baht.

The Thais have pegged their currency to the US$ for many years. Now they are starting to see some sense.

Their exports where very poor and they started to pull away from supporting the Baht and also cut interest rates.

If you listen to all the so called experts you would have lost a fortun. Some of the predictions given early to mid last year by the experts.

1: Silver will be $50-$100 an ounce by the end of 2014, it is $17.

2: The US stock market will crash by the end of 2014 it raced away and it broke all records.

3: The US$ would crash by the end of 2014.

4: The US oil boom, oil crashed down to a low of $40 the experts said it will go to a low of $30,ha. It is now over $60.

The USA can manipulate anything they want they are experts at it. Quite a few of the other large country's want to kill the $ as the main currency, they got no chance.

The US$ will always be the best safest currency to hold.

[shaurene]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

no peg to the $ since 1998.[/quote

Rubbish, sorry.]

[AyG]

The US$ will always be the best safest currency to hold.

They used to say that about the denarius.

[SiSePuede419]

"US$ will always be the best safest currency to hold."

Yes, due to the massive systemic corruption in China and the, ahem...Teutonic problem Europe keeps having periodically?

The Dollar will surely last until human extinction.

Cockroaches will enjoy the luxurious thread count of US dollars for their bedding, 555

[Naam]

that's rubbish. the thai baht has only recently become weaker, before it's been incredibly strong especially against other Asian currencies. The export industry has been complaining a long time because the baht was so strong and now after various actions from the BoT the baht finally weakened a bit. Certainly not the worst performing currency in the world.

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

50 years ago the Thai baht was pegged at 25 to the US$ and 40 to the GB£. This worked when these currencies were relatively stable, but with the world financial markets in disarray it was no longer appropriate, and they now stand wherever the market will let them.

no fairy tails or "understandings" please! here are the details:

http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=2

[KittenKong]

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

The value of the Baht has been manipulated for years, which is easy enough to do when your currency is subject to exchange controls and not extensively traded internationally.

Recently the Thai authorities have been encouraging the Baht to slide slightly to maintain competitivity.

Is that a peg? Semantics really.

[IMA_FARANG]

My understanding is the Thai baht has been pegged to the US dollar for years, and it's only recently the peg has been removed.

The value of the Baht has been manipulated for years, which is easy enough to do when your currency is subject to exchange controls and not extensively traded internationally.

Recently the Thai authorities have been encouraging the Baht to slide slightly to maintain competitivity.

Is that a peg? Semantics really.

[edwinchester]

Ok let's look at the 2 currency's mentioned. For a start the Thai baht did not weaken the US$ has strengthened over all currency's The Euro crashed mainly because of the Greek problem and helped by the problems with Portugal, Italy, France and Spain. Over the last couple of weeks the Greek situation was starting to look like a deal could be struck and the Euro strengthened a lot. As soon as Greece is sorted out you will see the Euro rise a lot. 3 months ago I bought from Super Rich 1.000,000 Baht worth of Euro I sold it back on Monday morning and made 20,000 baht.

The Thais have pegged their currency to the US$ for many years. Now they are starting to see some sense.

Their exports where very poor and they started to pull away from supporting the Baht and also cut interest rates.

If you listen to all the so called experts you would have lost a fortun. Some of the predictions given early to mid last year by the experts.

1: Silver will be $50-$100 an ounce by the end of 2014, it is $17.

2: The US stock market will crash by the end of 2014 it raced away and it broke all records.

3: The US$ would crash by the end of 2014.

4: The US oil boom, oil crashed down to a low of $40 the experts said it will go to a low of $30,ha. It is now over $60.

The USA can manipulate anything they want they are experts at it. Quite a few of the other large country's want to kill the $ as the main currency, they got no chance.

The US$ will always be the best safest currency to hold.

The Euro has risen about 8% against the dollar since February. An extra 2% from SuperRich doesn't seem that much.

[Berkshire]

no fairy tails or "understandings" please! here are the details:

http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=2

Interesting read. Everyone should read that link before they start making up conspiracy theories.

[Anon999]

Try comparing the charts of the Baht against the US$, GBP and Euro and you see the baht has been very strong up until the recent past. Like all currencies they fluctuate eventually.

[SunLover2]

Bloomberg business news weighs in: http://www.bloomberg.com/news/articles/2015-05-18/baht-in-currency-war-after-first-to-worst-rout-a-year-after-coup

SL