Baht hits high note against the dollar

[webfact]

Baht hits high note against the dollar

By Coconuts Bangkok 

Photo: Images Money/Flickr

BANGKOK: -- Yesterday, the Thai baht hit a one-year high in relation to the U.S. dollar.

The baht hit a peak of 34.76 against the dollar in a new high for the current year.

TMB Analytics vice-president Jitipol Puksamatanan gave his expert opinion on why the baht is so strong right now. He noted that Brexit and weaker-than-usual U.S. economic forecasts are most likely the causes. He saw the baht getting stronger as investor interest turns away from those heavyweights and toward emerging markets, reported Bangkok Post.

Full story: http://bangkok.coconuts.co/2016/08/02/baht-hits-high-note-against-dollar

-- COCONUTS BANGKOK 2016-08-02

[NextStationBangkok]

The picture is nice. I am not sure how good it would be if Baht is stronger. Farangs can buy few less beers for the same bucks.

[chowny77]

I still scratch my head trying to understand why the baht seems so strong against the dollar and euro when they hardly seem to be exporting anything of much value. The banks must be fudging the exchange rates.

[Alive]

I don't get this story. This is a weak baht. In 2013 the baht was 30 to the dollar. That means Thais could buy more with their money back then. How is this a strong baht? I guess the key words are 'the current year' otherwise the baht is generally weaker than it has been in years.

[MissAndry]

9 minutes ago, chowny77 said:

I still scratch my head trying to understand why the baht seems so strong against the dollar and euro when they hardly seem to be exporting anything of much value. The banks must be fudging the exchange rates.

Thailand has higher base rate than the western countries, so value of it's currency is higher.

That's all there is to it. Currency value not dependent on exports, borrowing, balance of payments ..... just interest rates.

[Alive]

A 2015 -2016 breakdown...

 

[Hawk]

39 minutes ago, MissAndry said:

Thailand has higher base rate than the western countries, so value of it's currency is higher.

That's all there is to it. Currency value not dependent on exports, borrowing, balance of payments ..... just interest rates.

Interest rates alone do not determine the value of a currency. Two other factors that are often of greater importance are political and economic stability and the demand for a country's goods and services.  High interest rates normally attract more foreign investment but the opposite is happening in Thailand because foreign investors are staying away, the political situation is in turmoil and the economic situation is in a decline.

So a hidden hand must be at work, people over at the Bank of Thailand manipulating the exchange rate. 

 

Edited August 2, 2016 by Hawk

[dageurreotype]

What surprised me when first spotting this headline is it's implied triumphalism, forgetting or not caring that the unwarranted high value of the baht will drive exports down even further. Absurd 

[sahibji]

weaker baht could attract more tourists in theory but personal experience has shown that street economics always outsmart such  currency volatility. their price adjustments wipe out any benefit visitors might enjoy as a result of currency weakness.

[peterb17]

3 hours ago, NextStationBangkok said:

The picture is nice. I am not sure how good it would be if Baht is stronger. Farangs can buy few less beers for the same bucks.

Don't feed the Troll

[how241]

It's always hard to understand why a currency has a certain price.  I'm sure it is market manipulation, like that occurs is many markets.

[Redline]

For one thing, strong was when it was 28 to the dollar.  The US economic forecast has not been negative.  To the contrary in fact.  More gobbygook

[elgordo38]

3 hours ago, MissAndry said:

Thailand has higher base rate than the western countries, so value of it's currency is higher.

That's all there is to it. Currency value not dependent on exports, borrowing, balance of payments ..... just interest rates.

I heard that the BofT was going to step in today anybody else hear that??

[IAMHERE]

4 hours ago, NextStationBangkok said:

The picture is nice. I am not sure how good it would be if Baht is stronger. Farangs can buy few less beers for the same bucks.

Yah, want to even think about posting a similar picture using local currency ?

[Roota]

4 hours ago, chowny77 said:

I still scratch my head trying to understand why the baht seems so strong against the dollar and euro when they hardly seem to be exporting anything of much value. 

Trade balance is only one factor in foreign exchange rates, but since you brought it up: Thailand is currently enjoying quite a strong trade surplus vs.continuing deficits in the U.S. every year. And with the Thai trade surplus predicted to hit almost USD 18 billion this year and 30 billion next year (Focus Economics) I wouldn't expect the trend to change any time soon.

[Ricardo]

1 hour ago, Redline said:

For one thing, strong was when it was 28 to the dollar.  The US economic forecast has not been negative.  To the contrary in fact.  More gobbygook

"US GDP growth misses forecasts" & "The world's largest economy grew at an annual rate of 1.2% in the three months to June, far below forecasts of 2.6%"

http://www.bbc.com/news/business-36922368

 

[Redline]

1 minute ago, Ricardo said:

"US GDP growth misses forecasts" & "The world's largest economy grew at an annual rate of 1.2% in the three months to June, far below forecasts of 2.6%"

http://www.bbc.com/news/business-36922368

 

True, but that was mainly because of the Brexit vote.  I am looking at medium range forecasts.  Also, for developed countries these days 2 percent looks good, which is what the yearly figure will likely be.   It's not just GDP that is to be looked at~employment, inventories, banking, tech, real estate, savings, spending, factory orders...most importantly housing and monetary policy projections.  If you watch Bloomberg and read business news websites, you can get a better idea.  If they just say that Thai exports are poor, that is a better justification.

[goatfarmer]

1 hour ago, how241 said:

It's always hard to understand why a currency has a certain price.  I'm sure it is market manipulation, like that occurs is many markets.

Unlikely. Currency markets are too big to manipulate for very long. Look at the chart posted by 'Alive', above. It shows a slow and steady trend of strengthening against the dollar since the low point of 2015. Nothing very remarkable going on here.

[chiang mai]

4 hours ago, MissAndry said:

Thailand has higher base rate than the western countries, so value of it's currency is higher.

That's all there is to it. Currency value not dependent on exports, borrowing, balance of payments ..... just interest rates.

"That's all there is to it. Currency value not dependent on exports, borrowing, balance of payments ..... just interest rates."

 

So the Brazilian Real is a good deal!!!

 

 

[MiKT]

The Baht always drops at the end of the month because that's when Expats remit their money to Thailand to keep the mia/noy in the style to which they have become accustomed. Especially if they have more than one remitter.

555

[diddygq]

I only wish the Thai banks followed the daily rate.  ATM's raping people giving only like 30-32 baht when withdrawing cash.

[peterb17]

You must understand that using terms such as ' raping ' will flag up alarm bells- and maybe you will be taken away for attitude adjustment .

Please watch your language in future .

Best Wishes . Homeland Security. 

[Acharn]

6 hours ago, Alive said:

I don't get this story. This is a weak baht. In 2013 the baht was 30 to the dollar. That means Thais could buy more with their money back then. How is this a strong baht? I guess the key words are 'the current year' otherwise the baht is generally weaker than it has been in years.

Where have you been? The dollar has been very strong at over 35 baht (often as high as 35.5) for the last year. I've been expecting it to drop for some time. I expect this is from the report that U.S. GDP only grew at an annual rate of 1.2% during the 2nd quarter and 1st quarter growth was revised downward to 0.8%. U.S. bond prices are still at historic highs, though (meaning interest rates are at historic lows).

[Acharn]

35 minutes ago, diddygq said:

I only wish the Thai banks followed the daily rate.  ATM's raping people giving only like 30-32 baht when withdrawing cash.

Don't know who is charging you. When I withdraw money from my Credit Union Visa card I get charged at an exchange rate very close to the posted daily rate, sometimes a little better. I think your foreign bank, or credit card, are the ones who decide on the rate to use.

[Acharn]

2 hours ago, Redline said:

True, but that was mainly because of the Brexit vote.  I am looking at medium range forecasts.  Also, for developed countries these days 2 percent looks good, which is what the yearly figure will likely be.   It's not just GDP that is to be looked at~employment, inventories, banking, tech, real estate, savings, spending, factory orders...most importantly housing and monetary policy projections.  If you watch Bloomberg and read business news websites, you can get a better idea.  If they just say that Thai exports are poor, that is a better justification.

I think you're mistaken. If I understand you correctly, you are saying the American economy grew at a very low rate because of Brexit. I am American, and I try to keep somewhat informed about economic trends. The Brexit vote was held on 23 June, and was expected to be in favor of staying, so I really don't see how it could have affected the American economy throughout the 2nd Quarter, which ends on 30 June. The 1st Quarter results were also revised down to an annual rate of 0.8%, so year to date growth has been very disappointing. You seem to be ignoring the fact that the Federal Reserve Bank and most big investment banks were predicting growth of around 2.6% for the 2nd quarter. Of course Europe is doing much worse, except, naturally, for Germany.

Edited August 2, 2016 by Acharn

[chiang mai]

49 minutes ago, diddygq said:

I only wish the Thai banks followed the daily rate.  ATM's raping people giving only like 30-32 baht when withdrawing cash.

"the daily rate", does your mum know you're not in your room!

 

 

[boomerangutang]

1 hour ago, diddygq said:

I only wish the Thai banks followed the daily rate.  ATM's raping people giving only like 30-32 baht when withdrawing cash.

I don't know your money situation, but I keep baht in a Thai bank.  That way, I don't pay any fees when I withdraw, and no currency exchange fees.  If that sort of thing is plausible for you, you could avoid some fees.

[Ricardo]

1 hour ago, diddygq said:

I only wish the Thai banks followed the daily rate.  ATM's raping people giving only like 30-32 baht when withdrawing cash.

Well I got 34.6, on a transfer of US$ sent from HSBC-Jersey to my SCB-account yesterday, and was drawing cash-Baht this morning  ...  perhaps people using a foreign credit-card to draw from a Thai ATM should seek a less-expensive way to fund their spending ?

[swissie]

CORRECTION: It's not the Bht that is strong(er) against the $. The $ is weakening against other currencies, basically across the board.

 

Cheers.

[diddygq]

6 hours ago, Acharn said:

Don't know who is charging you. When I withdraw money from my Credit Union Visa card I get charged at an exchange rate very close to the posted daily rate, sometimes a little better. I think your foreign bank, or credit card, are the ones who decide on the rate to use.

It was like this for years, however, about 4 months ago it changed and every time I use the ATM it gives me a crap rate.  I have a few different US banks, including Credit Union.  The ATM's post on the menu the crappy rate and asks if I would like to continue.  I have no choice but to say yes if I want to withdraw the money.  I'm actually going to look into this.

Edited August 2, 2016 by diddygq