Thai Baht likely to weaken further this week

[webfact]

Thai Baht likely to weaken further this week

BANGKOK, 10 August 2015 (NNT)-The Thai baht is likely to decline further this week, while fluctuations in the Thai stock market will continue for another week.

According to Kasikorn Research Center (KRC), Thai stocks are subjected to listed companies' financial statements, the U.S. Central Bank’s statement in terms of retail sales performance, and consumer confidence as well as the Gross Domestic Product of the Euro zone.

The KRC has meanwhile predicted that the Chinese Industrial Index will encounter the resistance and support levels of 1,440 and 1,410 respectively.

The Thai Baht is expected to fluctuate between 35 to 35.25 baht against the greenback this week. The fluctuation of the Thai currency is said to be susceptible to similar factors as the Thai stocks.


-- NNT 2015-08-10

[kutjebu]

Together with the Euro.

[Srikcir]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

[CNXTim]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

[yuv06]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

You are wrong Malaysian currency is also down worse ever "Malaysia's ringgit hit at a 17-year low as its foreign exchange reserves fell below the $100 billion mark while leveraged funds have increased their short bets on other commodity-linked currencies such as the Canadian dollar and the Australian dollar in recent days." http://khaleejtimes.com/business/markets/asian-stocks-near-1-12-year-lows-on-china-data-dlr-steady

[yuv06]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

Unlikely they have learnt their lesson in 1997 and they have been trying to weaken the THB for quite sometime but it was like a stubborn boner won't get down

[IsaanUSA]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

You are wrong Malaysian currency is also down worse ever "Malaysia's ringgit hit at a 17-year low as its foreign exchange reserves fell below the $100 billion mark while leveraged funds have increased their short bets on other commodity-linked currencies such as the Canadian dollar and the Australian dollar in recent days." http://khaleejtimes.com/business/markets/asian-stocks-near-1-12-year-lows-on-china-data-dlr-steady

So wouldn't that be good for new investments?

[Thai at Heart]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

Unlikely they have learnt their lesson in 1997 and they have been trying to weaken the THB for quite sometime but it was like a stubborn boner won't get down

The USA has been printing money for 7 years now, and u say they have been trying to weaken the baht? They have been desperately trying to stop it getting too strong. They have about 160bn usd on hand, which is way more than 97, and the baht is devaluing.

What lesson do you think they haven't learnt?

[yuv06]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

Unlikely they have learnt their lesson in 1997 and they have been trying to weaken the THB for quite sometime but it was like a stubborn boner won't get down

The USA has been printing money for 7 years now, and u say they have been trying to weaken the baht? They have been desperately trying to stop it getting too strong. They have about 160bn usd on hand, which is way more than 97, and the baht is devaluing.

What lesson do you think they haven't learnt?

I think in 97 they used their reserves to buy THB to to try shore up the THB value but I don't think they are doing now - that is what I mean

[chiang mai]

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

[chiang mai]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

Actually not, the level of foreign currency reserves is the same today as it was one year ago.

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

[chiang mai]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

Politics and human trafficking have absolutely zero impact on the value of THB. In fairly recent times we've seen tanks on the streets and snipers shooting into crowds in Bangkok, THB never weakened, in fact, the opposite happened!

[yuv06]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

Politics and human trafficking have absolutely zero impact on the value of THB. In fairly recent times we've seen tanks on the streets and snipers shooting into crowds in Bangkok, THB never weakened, in fact, the opposite happened!

So what is your take on the THB weakening? Is it under attack like 97?

[Thai at Heart]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

Unlikely they have learnt their lesson in 1997 and they have been trying to weaken the THB for quite sometime but it was like a stubborn boner won't get down

The USA has been printing money for 7 years now, and u say they have been trying to weaken the baht? They have been desperately trying to stop it getting too strong. They have about 160bn usd on hand, which is way more than 97, and the baht is devaluing.

What lesson do you think they haven't learnt?

I think in 97 they used their reserves to buy THB to to try shore up the THB value but I don't think they are doing now - that is what I mean

Well, then that would make it incredibly LIKELY they have learnt their lesson. They aren't trying to stop if falling.

[Thai at Heart]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

Politics and human trafficking have absolutely zero impact on the value of THB. In fairly recent times we've seen tanks on the streets and snipers shooting into crowds in Bangkok, THB never weakened, in fact, the opposite happened!

So what is your take on the THB weakening? Is it under attack like 97?

Not at all. Usd the flooded into Asia looking for better interest rates are now returning to the USA.

[NeverSure]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

No, Thailand keeps US treasury bill reserves to back its international trades. Few will accept or pay in baht for imports or exports. If it sold its US treasuries it would be out of the import/export biz.

The USA has been printing money for 7 years now, and u say they have been trying to weaken the baht? They have been desperately trying to stop it getting too strong. They have about 160bn usd on hand, which is way more than 97, and the baht is devaluing.

What lesson do you think they haven't learnt?

The US hasn't been "printing money". This statement is written repeatedly by reporters and foreign politicians who never managed a nation's money. There aren't more $USD in the world today than there were years ago other than to provide for inflation.

The US has been engaged in quantitative easing or QE which is done by increasing the percentage of depositors' money banks may loan. This along with lower interest rates makes borrowing more money and spending it into the economy cheaper and allowable. This "increases the money supply" available to the general economy and that can be reversed by "tightening money". When the Fed next wants to tighten money it will increase interest rates to discourage borrowing and it will decrease the percentage of depositors' money banks may loan.

"Printing money," 555.

Actually not, the level of foreign currency reserves is the same today as it was one year ago.

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

Exactly. Thailand and many other nations must maintain an adequate amount of foreign reserves to have money to engage in international trade. If that money was spent Thailand would be out of biz.

Cheers.

[timendres]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

Politics and human trafficking have absolutely zero impact on the value of THB. In fairly recent times we've seen tanks on the streets and snipers shooting into crowds in Bangkok, THB never weakened, in fact, the opposite happened!

So what is your take on the THB weakening? Is it under attack like 97?

Currencies are simply instruments like any other - they are bought and sold. More buying, price goes up, more selling, price goes down.

The weakness in the baht would imply that there are more sellers than buyers. Take you pick for the explanation. Foreign stock investors exiting the Thai stock market - receive baht and sell to get local currency. Fewer exports, less buying of the baht to buy the exported products. Fewer tourists, less buying of the baht to spend while here. Fewer foreign business investors.... you get the idea.

[Thai at Heart]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

No, Thailand keeps US treasury bill reserves to back its international trades. Few will accept or pay in baht for imports or exports. If it sold its US treasuries it would be out of the import/export biz.

The USA has been printing money for 7 years now, and u say they have been trying to weaken the baht? They have been desperately trying to stop it getting too strong. They have about 160bn usd on hand, which is way more than 97, and the baht is devaluing.

What lesson do you think they haven't learnt?

The US hasn't been "printing money". This statement is written repeatedly by reporters and foreign politicians who never managed a nation's money. There aren't more $USD in the world today than there were years ago other than to provide for inflation.

The US has been engaged in quantitative easing or QE which is done by increasing the percentage of depositors' money banks may loan. This along with lower interest rates makes borrowing more money and spending it into the economy cheaper and allowable. This "increases the money supply" available to the general economy and that can be reversed by "tightening money". When the Fed next wants to tighten money it will increase interest rates to discourage borrowing and it will decrease the percentage of depositors' money banks may loan.

"Printing money," 555.

Actually not, the level of foreign currency reserves is the same today as it was one year ago.

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

Exactly. Thailand and many other nations must maintain an adequate amount of foreign reserves to have money to engage in international trade. If that money was spent Thailand would be out of biz.

Cheers.

It's the vernacular term that has been going on to describe quantitative easing. The supply of usd to the market has been increased. A common term for this is printing money. I.e. You print more u increase the supply thus u make it worth less. Thus the USD has been weakening for 8 years, and finally QE is now being reduced thus the USD is strengthening.

I would say QE is a fancy way of printing money, which is a vernacular term for saying boosting the money supply.

Either way, the USD Has to devalue over the long term. This amount of debt is unsustainable. Then see how strong the baht gets in another 5years..

In some ways, they tried printing money and that wasn't enough so they went onto quantitative easing. They swapped cash for illiquid assets in the market.

Either way, anyone who reckon the USD will keep its value in 10 years time is delusional. The only way out is continued devaluation.

Edited August 10, 2015 by Thai at Heart

[BuckBee]

wasn't this meant to be last weeks news !!!

[chiang mai]

Predictable since January 2015. Likely to remain bt35-bt36 to end of year.

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen. Junta behavior and policies through end of 2015 will set the trend for the baht in 2016.

This is not the time for foreign investment. Vietnam and Malaysia are currently best regions in ASEAN for investments.

Politics and human trafficking have absolutely zero impact on the value of THB. In fairly recent times we've seen tanks on the streets and snipers shooting into crowds in Bangkok, THB never weakened, in fact, the opposite happened!

So what is your take on the THB weakening? Is it under attack like 97?

No it's not under attack, it's actually hugely difficult if not impossible to successfully attack THB from overseas because THB is a restricted currency that cannot be freely exported - there are limits to the amount of THB that overseas banks can hold and they are quite low. So any so called attack needs to be self administered, just like in 1997 when two factors came together - one was the huge amount of offshore (construction) loans denominated in USD and the second, was BOT's tying up their foreign currency reserves into long dated instruments (negating the possibility of any potential defense).

The current weakening is about a number of issues, primarily, USD strengthening and capital outflows in light of the rapidly improving US economic picture, lowered GDP/export forecasts resulting from a global slowdown and reduced investor confidence resulting from the lack of a coherent economic plan by government.

My ten cents on THB is that, against USD and GBP, it's very close to the bottom with far more upside than downside on the cards, however a number of possible external factors have the potential to impact that, the Chinese economy, EU stability, ISIS/war/terrorism being three of them.

[Jessi]

Get out of Baht, It will be back @ 40 = $1, within 2 months.

[chiang mai]

Thailand's once massive reserves of US currency must be heading down. No amount of THB purchasing will stop this decline. It requires significant change in the Thai economy to halt the slide.

No, Thailand keeps US treasury bill reserves to back its international trades. Few will accept or pay in baht for imports or exports. If it sold its US treasuries it would be out of the import/export biz.

Actually not, the level of foreign currency reserves is the same today as it was one year ago.

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

Exactly. Thailand and many other nations must maintain an adequate amount of foreign reserves to have money to engage in international trade. If that money was spent Thailand would be out of biz.

Cheers.

Just to add: only USD 138 bill. of the total USD 160 bill of foreign currency reserves is in the form of securities, the remained is in other currencies.

https://www.imf.org/external/np/sta/ir/IRProcessWeb/data/tha/eng/curtha.htm#I

And since Thailand recently entered into a currency swap with China for trading purposes I presume much of that 'other' is in yuan.

[stoli]

Depending on the political and human trafficking situations in 2016, value of baht could improve or worsen.

Now that is an accurate prediction. The baht could improve or worsen. What if it just stays the same? You didn't cover that bet.

[fiddlehead]

Well, it's sure moving this morning.
Baht to dollar: 35.10 at 7 AM,

now: 9:54 AM : 35.35

[dageurreotype]

Together with the Euro.

Then it's a jolly good thing we British weren't persuaded to adopt the bloody thing, wasn't it.

[TigerandDog]

This might sound simplistic, even stupid, as I'm no economist, but if the Tha Govt wants to stop the baht from weakening, why not just raise interest rates. Personally I need to see the baht back around 29 - 30 baht to the AUD. When the Oz Govt raises interest rates, the AUD strengthens against the USD, which in turn sees the THB increase against the AUD. As I said sounds simplistic, and to most with an economics background most likely quite stupid. Actually I don't know why everything has to be gauged against the USD. Why don't countries just go back to setting their own rate of exchange (the way it used to be) instead of having the currency constantly fluctuating because of the poor economic decisions of the US and Europe. Once upon a time, you always new what your exchange rates would be, and you could plan accordingly. Now, you have no idea what's going to happen.

[yuv06]

This might sound simplistic, even stupid, as I'm no economist, but if the Tha Govt wants to stop the baht from weakening, why not just raise interest rates. Personally I need to see the baht back around 29 - 30 baht to the AUD. When the Oz Govt raises interest rates, the AUD strengthens against the USD, which in turn sees the THB increase against the AUD. As I said sounds simplistic, and to most with an economics background most likely quite stupid. Actually I don't know why everything has to be gauged against the USD. Why don't countries just go back to setting their own rate of exchange (the way it used to be) instead of having the currency constantly fluctuating because of the poor economic decisions of the US and Europe. Once upon a time, you always new what your exchange rates would be, and you could plan accordingly. Now, you have no idea what's going to happen.

Those days were good I remember the THB was always around 25 all the time

[Carmine6]

This might sound simplistic, even stupid, as I'm no economist, but if the Tha Govt wants to stop the baht from weakening, why not just raise interest rates. Personally I need to see the baht back around 29 - 30 baht to the AUD. When the Oz Govt raises interest rates, the AUD strengthens against the USD, which in turn sees the THB increase against the AUD. As I said sounds simplistic, and to most with an economics background most likely quite stupid. Actually I don't know why everything has to be gauged against the USD. Why don't countries just go back to setting their own rate of exchange (the way it used to be) instead of having the currency constantly fluctuating because of the poor economic decisions of the US and Europe. Once upon a time, you always new what your exchange rates would be, and you could plan accordingly. Now, you have no idea what's going to happen.

Not really sure the government wants to stop the baht from weakening. In fact they specifically stopped supporting it a few months ago, which is when it started the recent move. One big thing a weaker baht does is lower the cost of commodities like rice and sugar to other countries. Which is of interest right now. Also tourism. The flip side is imports cost more, with one big one being oil. But the oil price drop makes that less of an issue. They surely don't want the baht to move too weak too fast. But unless someone has said something about what they're trying to get to, who knows what they'll be willing to live with. Maybe they are past where they wanted to be, and maybe not.

Thailand takes a hammer to the baht

http://www.cnbc.com/2015/05/05/thailand-takes-a-hammer-to-the-baht.html

The US dollar is relevant since it is still the most commonly used currency for international trade, and I mean even when trading with other countries besides the US. So something imported from or sold to somewhere else in Asia is commonly transacted in US dollars.

Even for Thailand's trade with the EU, almost 2/3 is received in US dollars for exports and 42% paid for EU imports in US dollars, instead of Euros. With ASEAN countries it more like 80% average in US dollars between import/export. The trend is generally away from using the dollar, though the last couple years the dollar gained share as less Thai trade was paid in Yen.

You can check the tables that break down trade by currency here:

https://www.bot.or.th/English/Statistics/EconomicAndFinancial/Pages/StatInternationalTrade.aspx

Edited August 11, 2015 by Carmine6

[Thai at Heart]

This might sound simplistic, even stupid, as I'm no economist, but if the Tha Govt wants to stop the baht from weakening, why not just raise interest rates. Personally I need to see the baht back around 29 - 30 baht to the AUD. When the Oz Govt raises interest rates, the AUD strengthens against the USD, which in turn sees the THB increase against the AUD. As I said sounds simplistic, and to most with an economics background most likely quite stupid. Actually I don't know why everything has to be gauged against the USD. Why don't countries just go back to setting their own rate of exchange (the way it used to be) instead of having the currency constantly fluctuating because of the poor economic decisions of the US and Europe. Once upon a time, you always new what your exchange rates would be, and you could plan accordingly. Now, you have no idea what's going to happen.

Not really sure the government wants to stop the baht from weakening. In fact they specifically stopped supporting it a few months ago, which is when it started the recent move. One big thing a weaker baht does is lower the cost of commodities like rice and sugar to other countries. Which is of interest right now. Also tourism. The flip side is imports cost more, with one big one being oil. But the oil price drop makes that less of an issue. They surely don't want the baht to move too weak too fast. But unless someone has said something about what they're trying to get to, who knows what they'll be willing to live with. Maybe they are past where they wanted to be, and maybe not.

Thailand takes a hammer to the baht

http://www.cnbc.com/2015/05/05/thailand-takes-a-hammer-to-the-baht.html

The US dollar is relevant since it is still the most commonly used currency for international trade, and I mean even when trading with other countries besides the US. So something imported from or sold to somewhere else in Asia is commonly transacted in US dollars.

Even for Thailand's trade with the EU, almost 2/3 is received in US dollars for exports and 42% paid for EU imports in US dollars, instead of Euros. With ASEAN countries it more like 80% average in US dollars between import/export. The trend is generally away from using the dollar, though the last couple years the dollar gained share as less Thai trade was paid in Yen.

You can check the tables that break down trade by currency here:

https://www.bot.or.th/English/Statistics/EconomicAndFinancial/Pages/StatInternationalTrade.aspx

Countries are much better off targetting inflation than currency values.

Thailand has almost no gdp growth and inflation is very low. The prediction is that rates will stay the same or drop. USA is jn the opposite position..

[Berkshire]

This might sound simplistic, even stupid, as I'm no economist, but if the Tha Govt wants to stop the baht from weakening, why not just raise interest rates. Personally I need to see the baht back around 29 - 30 baht to the AUD. When the Oz Govt raises interest rates, the AUD strengthens against the USD, which in turn sees the THB increase against the AUD. As I said sounds simplistic, and to most with an economics background most likely quite stupid. Actually I don't know why everything has to be gauged against the USD. Why don't countries just go back to setting their own rate of exchange (the way it used to be) instead of having the currency constantly fluctuating because of the poor economic decisions of the US and Europe. Once upon a time, you always new what your exchange rates would be, and you could plan accordingly. Now, you have no idea what's going to happen.

The currency exchange rate does not dictate monetary policy. If Thailand wanted to spur economic growth, they would lower interest rates...which is what they're doing. This makes money cheaper and increases the money supply in the economy. Indirectly, it does make the baht weaker and aids its export and tourism industries. Somebody wins, somebody loses. Over time, they may have to deal with inflation, at which time, they would increase rates to make money more expensive.

As for your other comment regarding currency fluctuation resulting in your inability to plan for the future...well, if you were living back home and spending your home currency, none of this would matter. An American living in the US could care less what the USD was doing in the international currency market. It's the choice we make to live abroad. But you have to admit that there was a time when our western currencies were doing rather well in Thailand and we all took advantage of that. Time to pay the piper.