Baht plunges 'quite fast' to six-year low against US dollar

[Thai at Heart]

Broke through the 35 threshold and seems to be moving a fast pace again.

Seems reasonable to think that, as we speak, the BOT will be desperately spending foreign reserves to keep the baht up. or at least around the 35.0 mark. It's a face thing and it's a bigger face thing than being able to brag about what the foreign reserves are.

When (if?) the traders start to short the baht, BOT will have no choice but to abandon the effort and accept the loss of face. Not enough muscle, not enough street cred.

If that does happen, then we'll see a whole different kind of fast.

Deja-vu anyone?

Over the years they haven't been buying baht at all to keep it strong. Just look at their forex standings. The USA has had low rates for the last 6 years and money has been jumping into Asia. Now it will jump back as rates in the USA will rise.

[chiang mai]

Broke through the 35 threshold and seems to be moving a fast pace again.

Seems reasonable to think that, as we speak, the BOT will be desperately spending foreign reserves to keep the baht up. or at least around the 35.0 mark. It's a face thing and it's a bigger face thing than being able to brag about what the foreign reserves are.

When (if?) the traders start to short the baht, BOT will have no choice but to abandon the effort and accept the loss of face. Not enough muscle, not enough street cred.

If that does happen, then we'll see a whole different kind of fast.

Deja-vu anyone?

Nonsense that you think BOT manages their currency reserves on the basis of face. As stated previously BOT had not been buying THB in order to keep THB strong, they were doing the opposite in an attempt to weaken its value.

Even bigger nonsense you don't understand that THB is a restricted currency.

And whilst it is true that the value of foreign currency reserves has fallen over the past month, much of it results from the fall in the price of gold.

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=94&language=ENG

Edited July 30, 2015 by chiang mai

[Red Queen]

Broke through the 35 threshold and seems to be moving a fast pace again.

Seems reasonable to think that, as we speak, the BOT will be desperately spending foreign reserves to keep the baht up. or at least around the 35.0 mark. It's a face thing and it's a bigger face thing than being able to brag about what the foreign reserves are.

When (if?) the traders start to short the baht, BOT will have no choice but to abandon the effort and accept the loss of face. Not enough muscle, not enough street cred.

If that does happen, then we'll see a whole different kind of fast.

Deja-vu anyone?

Nonsense that you think BOT manages their currency reserves on the basis of face. As stated previously BOT had not been buying THB in order to keep THB strong, they were doing the opposite in an attempt to weaken its value.

Even bigger nonsense you don't understand that THB is a restricted currency.

And whilst it is true that the value of foreign currency reserves has fallen over the past month, much of it results from the fall in the price of gold.

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=94&language=ENG

Well, everyone's entitled to an opinion, and I accept that's yours. Maybe you're right, maybe you're just blowing smoke.

I suspect the latter but I guess we'll see no?

[Red Queen]

Broke through the 35 threshold and seems to be moving a fast pace again.

Seems reasonable to think that, as we speak, the BOT will be desperately spending foreign reserves to keep the baht up. or at least around the 35.0 mark. It's a face thing and it's a bigger face thing than being able to brag about what the foreign reserves are.

When (if?) the traders start to short the baht, BOT will have no choice but to abandon the effort and accept the loss of face. Not enough muscle, not enough street cred.

If that does happen, then we'll see a whole different kind of fast.

Deja-vu anyone?

Over the years they haven't been buying baht at all to keep it strong. Just look at their forex standings. The USA has had low rates for the last 6 years and money has been jumping into Asia. Now it will jump back as rates in the USA will rise.

Well I guess you missed it but the conversation so far has been about what is happening now, not what may have happened not 6 years ago and in another country. The BOT has been trying to manipulate the Baht for a long time. Maybe you should read what Prasarn has said about it from time to time.

But hey, opinions are like bums, everyone's got one even - though some are more substantial than others.

May I suggest you look at the charts? Notice anything?

[chiang mai]

Do your research man, read the BOT report and read the regulations about restrictions on the Thai currency. And if those things don't work for you, look at the foreign currency reserve holdings history and see if you can match the sale of any part of them to the increase in the value of THB that you mention. After all, if the BOT was buying THB they would have to have sold USD which is only held in one place!

[Thai at Heart]

Broke through the 35 threshold and seems to be moving a fast pace again.

Seems reasonable to think that, as we speak, the BOT will be desperately spending foreign reserves to keep the baht up. or at least around the 35.0 mark. It's a face thing and it's a bigger face thing than being able to brag about what the foreign reserves are.

When (if?) the traders start to short the baht, BOT will have no choice but to abandon the effort and accept the loss of face. Not enough muscle, not enough street cred.

If that does happen, then we'll see a whole different kind of fast.

Deja-vu anyone?

Over the years they haven't been buying baht at all to keep it strong. Just look at their forex standings. The USA has had low rates for the last 6 years and money has been jumping into Asia. Now it will jump back as rates in the USA will rise.

Well I guess you missed it but the conversation so far has been about what is happening now, not what may have happened not 6 years ago and in another country. The BOT has been trying to manipulate the Baht for a long time. Maybe you should read what Prasarn has said about it from time to time.

But hey, opinions are like bums, everyone's got one even - though some are more substantial than others.

May I suggest you look at the charts? Notice anything?

It's happening now, because the fundamentals of the Thai economy are on the slide, and everyone expects interest rates to start rising in the USA and the UK.

This whining about the baht being too strong for too long isn't what has been happening. The USD has been incredibly weak for the last 5 years. Finally there are signs of inflation in the USA and logically the fed will increase rates for the first time since 2008 where they have been virtually zero.

http://mobile.nytimes.com/2015/07/30/business/economy/federal-reserve-meeting-interest-rates.html?referrer=

A falling baht might help out tourists but I doubt it will cause much of a bounce in exports. Many components of Thai exports have to be imported first.

Currently Thailand has 160bn forex on hand, about 14th in the world which is currently more than the UK and most of Europe. They have been stacking USD for many years to help the baht from getting too strong not the other way around.

Now, invested USD will move back out of Thailand to its home in the West to find higher rates so the baht will weaken.

It's nothing to do with face, Thailand baht is a complete minnow in comparison with the USD. The world has been awash with cheap USD since quantitative easing started.

[Red Queen]

It's nothing to do with face, Thailand baht is a complete minnow in comparison with the USD. The world has been awash with cheap USD since quantitative easing started.

Everything in Thailand has something to do with face my friend and to say that face has nothing to do with FX manipulation frankly doesn't speak of a good knowledge of Thai psychology.

But in the end, its a matter of opinion. I say I believe Thailand has been manipulating the value of the Thai baht, possibly not to very much real effect. You say it hasn't. Prasarn says it has, you say it hasn't. I say face is always a concern for Thais, you say it hasn't in this arena. Our opinions differ.

To be frank. apart from making the observation, I have no dog in the race, I don't actually care very much, though I would like the Thai self-esteem take a serious kicking. What seems clear is that the Thai economy is tanking and long may that continue.

Time will tell.

Edited July 30, 2015 by Red Queen

[Thai at Heart]

It's nothing to do with face, Thailand baht is a complete minnow in comparison with the USD. The world has been awash with cheap USD since quantitative easing started.

Everything in Thailand has something to do with face my friend and to say that face has nothing to do with FX manipulation frankly doesn't speak of a good knowledge of Thai psychology.

But in the end, its a matter of opinion. I say I believe Thailand has been manipulating the value of the Thai baht, possibly not to very much real effect. You say it hasn't. Prasarn says it has, you say it hasn't. I say face is always a concern for Thais, you say it hasn't in this arena. Our opinions differ.

To be frank. apart from making the observation, I have no dog in the race, I don't actually care very much, though I would like the Thai self-esteem take a serious kicking. What seems clear is that the Thai economy is tanking and long may that continue.

Time will tell.

Bernanke turning in the flow of USD has infinitely more oomph than face in Thailand. The ability of the BOT to overcome this deluge is absolutely tiny.

It's devaluing now, and largely Thailand is happy about it. The 1st world had a financial crisis. Do you expect their currencies to be strong.

The world forex market doesn't trade in face.

Edited July 30, 2015 by Thai at Heart

[elgordo38]

It's nothing to do with face, Thailand baht is a complete minnow in comparison with the USD. The world has been awash with cheap USD since quantitative easing started.

Everything in Thailand has something to do with face my friend and to say that face has nothing to do with FX manipulation frankly doesn't speak of a good knowledge of Thai psychology.

But in the end, its a matter of opinion. I say I believe Thailand has been manipulating the value of the Thai baht, possibly not to very much real effect. You say it hasn't. Prasarn says it has, you say it hasn't. I say face is always a concern for Thais, you say it hasn't in this arena. Our opinions differ.

To be frank. apart from making the observation, I have no dog in the race, I don't actually care very much, though I would like the Thai self-esteem take a serious kicking. What seems clear is that the Thai economy is tanking and long may that continue.

Time will tell.

Bernanke turning in the flow of USD has infinitely more oomph than face in Thailand. The ability of the BOT to overcome this deluge is absolutely tiny.

It's devaluing now, and largely Thailand is happy about it. The 1st world had a financial crisis. Do you expect their currencies to be strong.

The world forex market doesn't trade in face.

Bernanke's successor J. Yellen has no plan her and her and her Fed cohorts are winging it. When looking at the US economy they use terms like "cautiously optimist" in Fed speak but in the real world speak that means they are in trouble. This time around there were no Fed comments or projections they were erroneously silent. No rise in rates nothing. If you look outside of their fudged numbers you will see that wages are stagnant, consumer confidence is dropping, housing is stagnant or slightly sliding, underemployment figures are high, the dollar is to high, and well the list goes on. Yesterday Ford stated their China numbers would be lower (the worlds strongest economy at present) and VW also stated its earnings would be soft and I feel this is just the tip of the iceberg. When dealing with all the above you have to read between the lines as positive news is overblown and negative news gets the back page. Even though QE has ceased there is still a lot of fiat money rolling around that should be soaked up. Once rates start to climb most economist think they could be at 2 to 3% by the end of next year as the Fed is behind the curve on raising rates. If rates climb so will the US dollar (which the government does not want it to do) imports will climb exports will drop. Companies doing business abroad are already complaining about the high dollar to their politician flunkies next they will start screaming. Continued low interest rates is keeping the stock market aloft injecting it with laughing gas. Once rates rise the stock market mortgages cheap money could be in trouble. Big business will also moan as money to buy out their competitors and their own stock will get more expensive junk bonds floated to keep the fracking movement in place will possibly become valueless as oil drops as well and BB will get more vocal in their concerns and they are the tail that wags the political dog. Europe no doubt will be the first in trouble followed by Japan and lastly the US the debt triplets. We have built our financial house on quicksand.

[Thai at Heart]

It's nothing to do with face, Thailand baht is a complete minnow in comparison with the USD. The world has been awash with cheap USD since quantitative easing started.

Everything in Thailand has something to do with face my friend and to say that face has nothing to do with FX manipulation frankly doesn't speak of a good knowledge of Thai psychology.

But in the end, its a matter of opinion. I say I believe Thailand has been manipulating the value of the Thai baht, possibly not to very much real effect. You say it hasn't. Prasarn says it has, you say it hasn't. I say face is always a concern for Thais, you say it hasn't in this arena. Our opinions differ.

To be frank. apart from making the observation, I have no dog in the race, I don't actually care very much, though I would like the Thai self-esteem take a serious kicking. What seems clear is that the Thai economy is tanking and long may that continue.

Time will tell.

Bernanke turning in the flow of USD has infinitely more oomph than face in Thailand. The ability of the BOT to overcome this deluge is absolutely tiny.

It's devaluing now, and largely Thailand is happy about it. The 1st world had a financial crisis. Do you expect their currencies to be strong.

The world forex market doesn't trade in face.

Bernanke's successor J. Yellen has no plan her and her and her Fed cohorts are winging it. When looking at the US economy they use terms like "cautiously optimist" in Fed speak but in the real world speak that means they are in trouble. This time around there were no Fed comments or projections they were erroneously silent. No rise in rates nothing. If you look outside of their fudged numbers you will see that wages are stagnant, consumer confidence is dropping, housing is stagnant or slightly sliding, underemployment figures are high, the dollar is to high, and well the list goes on. Yesterday Ford stated their China numbers would be lower (the worlds strongest economy at present) and VW also stated its earnings would be soft and I feel this is just the tip of the iceberg. When dealing with all the above you have to read between the lines as positive news is overblown and negative news gets the back page. Even though QE has ceased there is still a lot of fiat money rolling around that should be soaked up. Once rates start to climb most economist think they could be at 2 to 3% by the end of next year as the Fed is behind the curve on raising rates. If rates climb so will the US dollar (which the government does not want it to do) imports will climb exports will drop. Companies doing business abroad are already complaining about the high dollar to their politician flunkies next they will start screaming. Continued low interest rates is keeping the stock market aloft injecting it with laughing gas. Once rates rise the stock market mortgages cheap money could be in trouble. Big business will also moan as money to buy out their competitors and their own stock will get more expensive junk bonds floated to keep the fracking movement in place will possibly become valueless as oil drops as well and BB will get more vocal in their concerns and they are the tail that wags the political dog. Europe no doubt will be the first in trouble followed by Japan and lastly the US the debt triplets. We have built our financial house on quicksand.

That's all as maybe. It is expected that rates will rise. If they don't expect the baht to restrengthen.

[zackattack]

Iraq and Afghanistan just made 4 billion dollar payments to the United States of America that is why the dollar is so strong.Hello

[lovetotravel]

Iraq and Afghanistan just made 4 billion dollar payments to the United States of America that is why the dollar is so strong.Hello

Link? Per the experts, this is not the reason for the strong dollar.