Baht hits new low on charter woes, US data

[webfact]

Baht hits new low on charter woes, US data
ERICH PARPART
THE NATION


Usara Wilaipich, senior economist at Standard Chartered Bank, said the fall in the baht was mainly due to external factors in the US and not so much on internal factors via the NRC

BANGKOK: -- US ECONOMIC data released last week and developments on the domestic political front sent the baht to a six-and-a-half year low at more than 36 per US dollar yesterday.

"The market now believes that the United States' central bank might have a greater probability of increasing its interest rate this month following the US' announcement that its unemployment rate has declined to 5.1 per cent while average income per hour has also increased more than expected," Chirathep Senivongs Na Ayudhya, spokesman for the Bank of Thailand, said yesterday.

The baht has retreated in tandem with currencies in the region since the market has swung back to the expectation that the US Federal Reserve will hike the country's interest rates at its meeting this month.

Tim Leelahaphan, economist at Maybank Kim Eng Securities (Thailand), said the baht jumped from 35.832 per US dollar at the opening bell to near 36 during the morning session due to news on the draft charter, the ongoing flow to safety driven by the uncertainty in the US Fed's rate hike and the uncertainty in China after the closing of the Shanghai and Hong Kong stock markets to mark the World War II anniversary last Thursday and Friday.

The baht climbed to Bt35.99 as of 10 am yesterday before rising to Bt36.12 as of 17:15pm.

"The US non-farm payroll figure that was revealed last Friday is not as good as expected, but their unemployment rate has continued to decline, which is a good thing, so there is still uncertainty regarding the Fed rate hike in September.

"That will be the same story for a while now," he said.

"Domestic political factors and the continuous outflow to safe havens such as the Japanese yen and US dollar contributed to the sinking of the baht this morning.

"But the political risk is still low, so once people digest the situation, then everything should follow the same path," he said.

Maybank's foreign exchange research team still expects the baht to trade around 36.5 per US dollar by the end of this quarter due to the government's current preference for a weak baht and the lead-up to the Fed lift-off this month, before slightly strengthening to 36.3 by the end of the year on the back of a milder moderation in the strength of the US dollar.

Nevertheless, political concerns are likely to lift the baht higher at the ends of the first and second quarters of next year to 36.5 and 37.

Usara Wilaipich, senior economist at Standard Chartered Bank, said the fall in the baht was mainly due to external factors in the US and not so much on internal factors via the NRC's rejection of the draft charter.

The baht has softened but there was no significant movement in the capital markets.

The Stock Exchange of Thailand Index rose 0.65 per cent from the opening of trading at 1,368.28 points to close at 1371.40 points.

"The baht's depreciation today is caused by the publication of US economic numbers last Friday.

"The unemployment rate has dropped to its lowest since June 2008 but the non-farm payroll is still lower than market consensus," she said.

"Meanwhile, Federal Reserve Bank of Richmond president Jeffrey Lacker commented that the case is still strong for the Federal Reserve to raise short-term interest rates in September, which has added to the current strengthening of the US dollar," she said.

StanChart expects the baht to peak at about Bt36 per US dollar at the end of this quarter, but maintains its prediction that the US Fed will hike its interest rate in December.

The global economic situation is not supportive for US rate normalisation right now.

"The Bt36 per US dollar is an important psychological barrier for foreign and domestic players while new fiscal stimulus measures mean that the role of monetary policy will be reduced.

"Therefore, the upside on the baht's deprecation will be limited in the next period," she said.

"The expectation that the Monetary Policy Committee will continue to maintain the policy rate at 1.5 per cent for a while along with the expected rises in imports from increased government spending on mega-projects means that the baht will have less room to depreciate further next year," she added.

The bank expects the baht to scale back to Bt35.6 per US dollar by the end of this year before strengthening to Bt34.75 by the end of the third quarter in 2016.

Source: http://www.nationmultimedia.com/business/Baht-hits-new-low-on-charter-woes-US-data-30268346.html


-- The Nation 2015-09-08

[NOC]

[Melyn]

Long may its demise continue

[noitom]

Anything the Thais publish is likely to be an artificial rate.

[craigt3365]

My sources are showing over 36B to the dollar. I've not seen that rate in a loooooong time.

[webfact]

Thai baht hits lowest point in 6 years

BANGKOK, 08 September 2015, (NNT) - The Thai baht hit its lowest point in six and a half years on Monday, reaching 36 baht to the U.S. dollar.

On September 7th, the baht rose to 35.99 baht to the dollar in the morning, before depreciating to 36.12 baht to the dollar around 5 pm.

According to the Bank of Thailand Spokesperson, Jirathep Seniwong Na Ayutthaya, the baht previously hit its lowest point in March 2009. He pointed out that depreciation of the baht is in line with the weakening of other currencies in the region.

He attributed the fall to the likelihood that the U.S. Federal Reserve would increase the benchmark interest rate, as the nation's unemployment rate is currently 5.1 percent. The U.S. hourly wages rate has also increased marginally to 25.09 dollars from 25.01 last recorded in August.


-- NNT 2015-09-08

[Prbkk]

But in perspective a long way from the black days of 1997 when the Baht hit 45 and the SET was 250 ( and used Mercs were going for 10 cents on the $)

[X pat]

​The baht was at 40 to the dollar when we moved here in 2006, just maby the cycle will repeat it self and the farmers will make some money on there exports.

[JingerBen]

But in perspective a long way from the black days of 1997 when the Baht hit 45 and the SET was 250 ( and used Mercs were going for 10 cents on the $)

Didn't the baht drop to around 55 to the US$ at that time?

Not sure... as they say, "If you can remember the good ol' days in Thailand, you weren't there."

[hakuho]

the article states that the U.S. unemployment rate is 5.1%; but everyone knows that it is really over 25%-50% in inner cities...c'mon, there are 93,000,000 folks out of the work force. do the math.

[Jon Wetherall]

But in perspective a long way from the black days of 1997 when the Baht hit 45 and the SET was 250 ( and used Mercs were going for 10 cents on the $)

Didn't the baht drop to around 55 to the US$ at that time?

Not sure... as they say, "If you can remember the good ol' days in Thailand, you weren't there."

It did. I doubt we will see that like again but I suspect 40 isn't out of the question. Prayuth ought to be a lift attendant:

"Going down..."

[craigt3365]

the article states that the U.S. unemployment rate is 5.1%; but everyone knows that it is really over 25%-50% in inner cities...c'mon, there are 93,000,000 folks out of the work force. do the math.

There will always be areas with higher (or lower) numbers than what's reported. That's true in every country. But the U-6 number is looking pretty good. At about 10.5% now. Almost to what it was in 2005, around 9% or so.

A friend just got back from Seattle and told how things are going. Incredibly well. He can't get construction workers as they are all fully booked out. Stores are packed, people working, life's pretty good.

But yes, more could be done for those currently under employed.

[Peabody]

the article states that the U.S. unemployment rate is 5.1%; but everyone knows that it is really over 25%-50% in inner cities...c'mon, there are 93,000,000 folks out of the work force. do the math.

Bogus

Very different from the unemployment rate.

[Doc46]

Who gives a shit about the US $,,,,we get paid in AU $,,,,We are down but still OK,,,,

[smotherb]

the article states that the U.S. unemployment rate is 5.1%; but everyone knows that it is really over 25%-50% in inner cities...c'mon, there are 93,000,000 folks out of the work force. do the math.

What?

Of course, there are many different ways to look at employment statistics—unemployed, underemployed, stopped looking for employment, unavailable for employment, etc. ad infinitim; however, here are some substantiated statistics.

The US unemployment rate for August 2015 is 5.1% http://data.bls.gov/timeseries/LNS14000000.

The US labor force is 158,104,000 http://www.dlt.ri.gov/lmi/laus/us/usadj.htm; The number unemployed in July 2015 was 8,266,000 http://www.dlt.ri.gov/lmi/laus/us/usadj.htm

You say unemployment is really 25-50%. Although there are pockets of unemployment higher than 5.1%, for example, youth (16-24) unemployment statistics are 12.2% for July 2015. However, youth unemployment is another issue—no experience, no training, little education, few skills, and parental support.

Of course, there may be pockets of unemployment even greater than that. For example, the unemployment rate for pregnant 93 year olds may well be over 50%, but rational people talk overall-averages.

Consequently, your 93,000,000 unemployment figure is wholly unsubstantiated; unless you are expecting all children under 16 and all adults over 15—regardless of marital status, retirement status, personal situations, physical ability, or mental disorders—to be employed.

If that were the case; since the US population was 321,692,959, yesterday, September 7, 2015 http://www.census.gov/popclock/ ; your figure of 93,000,000 is approximately 29% unemployment. If all living persons should be employed, you are within the uninformed and illogical range of unemployment; congratulations.

[Prbkk]

But in perspective a long way from the black days of 1997 when the Baht hit 45 and the SET was 250 ( and used Mercs were going for 10 cents on the $)

Didn't the baht drop to around 55 to the US$ at that time?

Not sure... as they say, "If you can remember the good ol' days in Thailand, you weren't there."

48.8 was as low as the official rate went ( December 1997) but the black money rate might have gone lower. Australians complain now about only getting 25 but I can recall in the early or mid 80s when AUD got 16 Baht.

USD is very strong now but if it continues, and interest rates go up making it even more attractive, economic growth will slow and it will have to come down (in theory)

[phuketrichard]

But in perspective a long way from the black days of 1997 when the Baht hit 45 and the SET was 250 ( and used Mercs were going for 10 cents on the $)

Didn't the baht drop to around 55 to the US$ at that time?

Not sure... as they say, "If you can remember the good ol' days in Thailand, you weren't there."

48.8 was as low as the official rate went ( December 1997) but the black money rate might have gone lower. Australians complain now about only getting 25 but I can recall in the early or mid 80s when AUD got 16 Baht.

USD is very strong now but if it continues, and interest rates go up making it even more attractive, economic growth will slow and it will have to come down (in theory)

Hit 55.5 back in Jan 98

http://www.tradingeconomics.com/thailand/currency

I brought land when it was at 48

moved here it was 22

But it was only 500 baht for an all nigher from Patpong :-)

[Tywais]

But in perspective a long way from the black days of 1997 when the Baht hit 45 and the SET was 250 ( and used Mercs were going for 10 cents on the $)

Didn't the baht drop to around 55 to the US$ at that time?

Not sure... as they say, "If you can remember the good ol' days in Thailand, you weren't there."

48.8 was as low as the official rate went ( December 1997) but the black money rate might have gone lower. Australians complain now about only getting 25 but I can recall in the early or mid 80s when AUD got 16 Baht.

USD is very strong now but if it continues, and interest rates go up making it even more attractive, economic growth will slow and it will have to come down (in theory)

The Thai Baht averaged 32.54 from 1981 until 2015, reaching an all time high of 55.50 in January of 1998 and a record low of 20.36 in July of 1981.

Trading Economics

[Jon Wetherall]

One thing seems certain. The flatlining economy and falling baht are definitely not the result of internal factors, it's those filthy foreigners again.

Absolutely. Definitely. Certainly. Not shred of a doubt.

Not Mr P's fault for tipping out an elected government and then flacking up the whole nation. Nossir.

[Jon Wetherall]

But in perspective a long way from the black days of 1997 when the Baht hit 45 and the SET was 250 ( and used Mercs were going for 10 cents on the $)

Didn't the baht drop to around 55 to the US$ at that time?

Not sure... as they say, "If you can remember the good ol' days in Thailand, you weren't there."

48.8 was as low as the official rate went ( December 1997) but the black money rate might have gone lower. Australians complain now about only getting 25 but I can recall in the early or mid 80s when AUD got 16 Baht.

USD is very strong now but if it continues, and interest rates go up making it even more attractive, economic growth will slow and it will have to come down (in theory)

The Thai Baht averaged 32.54 from 1981 until 2015, reaching an all time high of 55.50 in January of 1998 and a record low of 20.36 in July of 1981.

Trading Economics

Capture.JPG

I'm sure you'tre right, but the usefulness of an 'average' value (which I assume you mean to be 'mean' in this context is not particularly helpful and may be of no value at all.

[Nice Boyd]

Who gives a shit about the US $,,,,we get paid in AU $,,,,We are down but still OK,,,,

We Give a <deleted>,The Dollar is King,Too Bad,55555,we will enjoy till it lasts...