THB Exchange Rate News and Wire Transfer Questions?

[moon47]

Two fold question (one speculative and other policy related):

1. Where can I best find news and information related to the USD/THB exchange rate as it has gone off from a two week high of about 36.30 to about 35.60 as of Friday Jan 30th 2016. What is the cause of the recent decline if any and could it continue? The dollar actually had a fairly good rally on Friday because of the Japanese negative interest rate but the USD/THB still fell on Friday.

For small USD inflows the decline does not amount to too much but we are going to be buying some land soon and need to transfer a large amount in and that could mean a difference of almost 10,000THB per $10,000 USD's. Not a huge amount but nothing to just overlook. I have a fairly good handle on what other central banks and global news will affect other currency exchanges but it is difficult at best to find good sources to research the macro economics surrounding the USD/THB cross.

2. I just read the post about "Onshore/offshore Exchange Rates And Money Transfers" in this forum but am confused by a few things and have some questions.

What amount of inflow will be subject to offshore prices?

Would $1000 USD be subject to offshore prices in a wire transfer?

What is the Onshore/Ofshore difference?

Looking at xe.com I see they state that the offshore price as of today Saturday 30th of January 2016 is 35.6845

Bangkok bank states the rate for purchasing 50-100 dollar bills is 35.35

Is the bangkok bank rate onshore? If so the offshore rate is better from what i see by a small amount. Confused about that as I will get the xe.com rate If I use my bank that does not charge a fee for international ATM withdraw, I have checked. Minus the 200THB ATM fee that is less than 1% on a $1000 USD ATM withdrawal.

To summarize:

I would also like to analyze the probability of the UDS/THB exchange rate dropping further or recovering and doing so is not effective without good macro economic understanding.

Also as mentioned before I just want to get the best exchange for my USD after fees etc when it is time to transfer money over to a Thai bank to purchase land.

I need to understand al my options before i can do that effectively as well.

Thanks for any help,

R

[Pib]

Many different websites provide "their speculations" on why a particular currency/currency pair lost or gain value from day to day....and you will fine those speculations will vary...everyone has an opinion just like everyone has a you know what.

DO NOT let your home country bank (i.e. offshore rate) convert to baht when sending as you will surely get a few percent lower exchange rate compared to the Thai bank TT Buying Rate. Thai baht is not a major world currency...it's basically only used within Thailand...it's not prized by banks external to Thailand. Plus, western banks make nice fees (indirect) via a lower exchange. Send the funds in your home country currency and let the Thai bank do the conversion...you will get their TT Buying Rate which is about the best the common man can get. For incoming wire transfers you get the TT Buying Rate...you do not care about the Note rate (i.e., cash in hand exchanging it in a bank), Sight Bill Rate, etc.....just look at the TT Buying Rate.

There is no trigger level as to whether you get the offshore price (i.e., the sending bank rate) or the onshore rate (Thai bank rate). If "you" tell or allow your home country bank to send money pay particular attention to ensuring you send in your home country currency...do not let your sending bank convert unless you want to get a lower exchange rate/give bigger profits to your bank.

Beware of your home country bank...for some unless you specifically tell them not to convert/send in you home country currency they will automatically convert to baht at their exchange rate which they will probably refer to as "competitive." Remember, their lower exchange rate is an indirect fee/higher profit for them. When any bank/company advertises their rates/prices as "competitive" that is a flag to me that means there are better rates/prices. Heck, what your bank calls competitive may truly be but on the lower end/lower average of a competitive range.

The exchange rate you see at forex sites like xe.com are the mid-market exchange rate at the BIG money, wholesale level; it's not what banks offer because the banks reduce the their exchange rate by X-amount in order to make a profit...you see that referred to as "profit or margin spread" sometimes. While BIG money traders such as banks, funds transfer services, etc., can get exchange rates at/very close to the mid market forex rates, they then incorporate a spread (profit) when they start exchanging money for customers such as yourself. It will vary from bank to bank as to home much spread/profit they crank in.

It's going to be very, very hard to beat the Thai bank TT Buying Rate used for incoming wire transfers when you consider direct and indirect (hidden) fees in many banks and transfer services currency exchange services. Be sure to evaluate the direct and indirect fees combined with the currency exchange. You'll see many posts on ThaiVisa talking about a great exchange rate they got with maybe a money transfer service but provide few if any details about the other fees associated with the transfer. Or you see posts bragging about a no-fee transfer but then they say they got a good rate...well, what the heck is a "good" rate...to one person it might be anything within a few percent of the forex rates...of course only being within a few percent adds up to a lot of money if transferring a few thousands USD equivalent or more. Some people are satisfied with that....or worst yet, they are somewhat clueless about transferring money and go along with whatever their home country bank recommends/automatically does unless told otherwise...I can tell you would not be though. Or worst

Stop getting wrapped around the axle in looking at forex rates other than for a general knowledge on the current value and direction the exchange rate is going, because remember that is not the rate you will get from your home country bank or Thai bank...you will get a little lower rate since the banks must make a profit....they make their profit through their exchange rate spread and/or direct fee. A person needs to determine the rate they will get with whatever money transfer serivce/bank they are using with full consideration for upfront/direct fees. Oh yea, some banks use correspondent/intermediary banks which sometimes take a slice/charge fee as the money flows through them.

Now regarding the direction of the USD/TBH exchange rate, my opinion which has a 50-50 chance of being correct is it will slowly increase over 2016 but it will not be "constantly" going up...there will be ups and downs...peaks and dips along the that general trend upward. However, if some major political, financial, and mother nature event occurs that impact the market or just a particular region/country then all bets are off.

Summary: flip a coin regarding currency exchange rate direction.

[alfieconn]

Try and get some prices from Foreign exchange companies.

The offshore rate from the company i use will usually be the equivalent of the TT rate and the advantage of getting an offshore rate is that you know exactly what rate your getting on the day and can then decide if you want to do the deal or not, where as if the money is sent in your home currency you don't know what rate you are getting until 2 or 3 days later and if you don't like the rate then it is too late.

I can even look at my companies app and it will tell me approx what the rate is at the time.

I find their prices cheaper than my UK bank on smaller amounts and on a recent larger transaction 1.1m Baht i found the overall cost to be roughly the same as it would have been if i had used a UK bank.

I'm obviously looking at things from a UK perspective so you will need to check how much your US bank charges,incidentally there is a US subsidiary of the FX company i use.

[moon47]

Currencies move directionally for reasons other then those that can be covered by opinion. The Swiss Franc against the Euro was capped by the Swiss National Bank the ERU/CHF was not allowed to go below a certain level as the bank would take measures to keep the rate steadily above that level. Once the bank decided it no longer wanted to keep that cap the CHF spiked to highs not seen for years. There was no arguing the cause and effect of the before and after scenarios.

While a drastic example I just want to point out that macro economic situations have a very strong correlation with a countries exchange rate against other countries.

I could go into further detail but it is not really necessary, the point is that government bodies do and will affect their own exchange rate for various reasons and that often guides the overall trend among other factors.

It seems difficult to find good resources about the Thai government stance on their own currency and other aspects that may affect the exchange rate and I was hoping for more resources to do my own research.

That said the information is appreciated, thank you both.

R

Edited January 30, 2016 by moon47