Baht hits high note against the dollar

[diddygq]

5 hours ago, boomerangutang said:

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.

Yes, thanks.  I try to use my KTB Thai account as often as possible to avoid those hefty charges.  The only annoying thing is I originally opened the account in Khon Kaen and now I live in Bangkok so they charge a 20 baht fee for each transaction. 

Edited August 2, 2016 by diddygq

[BuckBee]

13 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. The banks must be fudging the exchange rates.

 

13 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.

 

Indeed, this story is absolute garbage ....

Edited August 2, 2016 by BuckBee

[JeffreyO]

and yet pre-coup it was 31 baht for a dollar.  Go figure....
Keep spinning that spin.

Edited August 2, 2016 by JeffreyO

[linksman00]

19 hours ago, Hawk said:

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. 

 

Could it be that massive airplane north of Thailand is about to have a very hard landing? 

[NextStationBangkok]

16 hours ago, IAMHERE said:

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

 

 

I think it is a disrespect for any currency, including Thai Baht. I am not sure why Coconut editors allow that.

[NextStationBangkok]

17 hours ago, peterb17 said:

Don't feed the Troll

 

It is not a troll, it is a valid point that, if Baht getting stronger definitely foreigners have less money to spend on local economy, i mean ordinary people will not get cash on hand only rich importers benefit from stronger Baht. The depiction with cutting US$ is totally wrong too, my message was sarcastic. As Thai style they think it attractive or joke until a  foreigner does anything against Thai. Damaging Thai Baht coin or note is offensive in Thailand, why not they follow the same for rest of the world ??

[Farang99]

50 years ago when I lived in Malaya the baht was 25 to the $, 40 to the £. Looks like we could be heading that way again any time soon.

[Acharn]

10 hours ago, diddygq said:

 

1 hour ago, Farang99 said:

50 years ago when I lived in Malaya the baht was 25 to the $, 40 to the £. Looks like we could be heading that way again any time soon.

Well, when I first came here in the Army in 1971, the baht was 20 to the dollar, and had been fixed at that for many years. When I retired and came back in 1982, Prem was the Prime Minister and the baht was fixed at 22.5 to the dollar, and had been since the Oct 6 counterrevolution. Sometime in the early 1990s (after Suchinda and Black May?) it was fixed at 25 to the dollar. In 1997 it went to the high 40s to the dollar; some people say it went over 50, but I don't remember seeing that. They couldn't maintain a fixed rate, and are now using what they call a "managed floating rate." Under Thaksin it slowly strengthened to around 32 to the dollar and hung there for a while. After that I would have to look up the timing (one site for that would be xe.com), but it gradually rose to 28.5 to the dollar and I was really getting worried, but then it weakened again to about 32, and then about a year ago the dollar shot up to over 35. So recently going from 35.5 to 34.5 means it is strengthening just now, but we'd like to know why to reduce uncertainty about the future. Those who say it's not strengthening now are not paying attention to history. 2013 was three years ago.

Edited August 3, 2016 by Acharn
Remove response to another post.

[billd766]

17 hours 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.

 

They do follow the daily rate as you can see here.

 

https://daytodaydata.net/default.aspx

 

But, and there is always a but, if you click on the tiny orange text link it will explain how the banks and credit card companies arrive at the rate of exchange that you see on your statement.

 

 

[Carlos Primeros]

I really don't know that they are writing about a strong Baht. Contrary the Baht is weak against the US$. If you have to pay 34,76 Baht for 1 $

then this means, that the Baht is weak. If you have to import goods and have to pay in US$ then you have to pay much more Baht.

If you have money in US$ then it is an advantage then you get more for your money. But from the Thai view of the exchange rate this is actually a disadvantage. For Thailand in this case the Baht has a lower value against the US$. Or am I missing something?

Cheers, Carlos

[Acharn]

19 hours ago, swissie said:

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

 

Cheers.

It's the context. Here, we're talking about the relation between the baht and the dollar. Yes, the dollar is weaker against most other currencies right now, probably connected with the very poor performance of the American economy so far this year. You can describe it differently depending on what you're looking at. The baht is stronger. The dollar is weaker. Same same, but different.

[Alive]

In 1996, pretty much everyone knew something was going on and there was fear in the air. I've got a little bit of that feeling now about the value of the baht in the future. For me the more it drops the more it'll hurt when I get out of this place. Things haven't been too bad for a long time but something has to give. Thailand will be cheap next year.

[Hawk]

Here is a quote from a person at the Bank of Thailand confirming that they manipulate the exchange rate;

 

"Assistant governor Jaturong Jantarangs told reporters the BoT already has tools to keep the baht at an appropriate level, without having to use only interest rates."

 

Appropriate level meaning what the military want the level to be even though the BOT acknowledge that the baht is to high against many currencies.

Edited August 3, 2016 by Hawk

[Brer Fox]

The rule of thumb says that a high baht will make exports more expensive and imports less expensive.

Lately their has been much news about how Thailand's exports are dropping dramatically. This higher baht will only exacerbate that situation so expect the country's export income to continue to slide.  

So now it appears that the military economic gurus are wanting an import driven economy. That will make submarines and tanks and new railway trains a whole lot cheaper. No flies on these boys!

 

 

 

 

 

 

 

 

[Redline]

On 8/2/2016 at 7:18 PM, Acharn said:

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.

Ok, but I heard more positive news today.  I watch Bloomberg, and a host of other news sources everyday, and also have stocks, bonds and real estate in the USA.  Statistics are what you make them, but the US is doing ok.  It is the current government, poor education, laws, the cost of labor and electricity.....that is affecting the economy here.  It is not the USA.  If they were to raise rates in the US, then yes, it would have an impact, but that's not happening in the near future.

[Acharn]

17 hours ago, Redline said:

Ok, but I heard more positive news today.  I watch Bloomberg, and a host of other news sources everyday, and also have stocks, bonds and real estate in the USA.  Statistics are what you make them, but the US is doing ok.  It is the current government, poor education, laws, the cost of labor and electricity.....that is affecting the economy here.  It is not the USA.  If they were to raise rates in the US, then yes, it would have an impact, but that's not happening in the near future.

I certainly hope it's not going to happen in the near future. Certainly the markets are against it, and all the market analysts, and all the big traders. Unfortunately, there are people who are presidents of Federal Reserve banks and members of the Federal Open Market Committee, where the decision is made, who are certain that we are faced with a Zimbabwe level of inflation if we don't raise interest rates at least twice this year. Anyway, yes, the U.S. is doing OK when compared with most of the rest of the world, where they've been making even worse decisions. Bloomberg is a good site for business news, but if you're comfortable with reading English I recommend regular reading of Economist's View ( http://economistsview.typepad.com/ ). He gives an extensive analysis of what the Federal Reserve is doing after every meeting. On a daily basis he has perhaps the best collection of articles and blog posts on economics.

Edited August 4, 2016 by Acharn

[Redline]

2 hours ago, Acharn said:

I certainly hope it's not going to happen in the near future. Certainly the markets are against it, and all the market analysts, and all the big traders. Unfortunately, there are people who are presidents of Federal Reserve banks and members of the Federal Open Market Committee, where the decision is made, who are certain that we are faced with a Zimbabwe level of inflation if we don't raise interest rates at least twice this year. Anyway, yes, the U.S. is doing OK when compared with most of the rest of the world, where they've been making even worse decisions. Bloomberg is a good site for business news, but if you're comfortable with reading English I recommend regular reading of Economist's View ( http://economistsview.typepad.com/ ). He gives an extensive analysis of what the Federal Reserve is doing after every meeting. On a daily basis he has perhaps the best collection of articles and blog posts on economics.

Thanks, I'm looking at the website now.  The crazy thing is, is that these huge and prolonged interventions by central banks has never been done before.  So, now we see a lot of unpredictability in many sectors, and no one knows how to play this game.  As, Bill Gross said yesterday, hard assets, gold, short term bonds and a few stocks are all that is looking good at this point.  The world's rich have been sweeping up hard assets like mad (art, real estate, diamonds...) for years, even inflating those assets.  There are still many opportunities in this area.

I certainly don't see Zimbabwe, and I would be surprised if we get 1 rate hike this year.  I do see a situation like Japan with no inflation.  Like the US before, and now the BOJ, and the ECB distorting bond values, it looks like it could lead to a disaster if worldwide rates drop much lower.  I believe, like many, that governmental investment (training programs, infrastructure, health and education, transportation, tax reform, social programs...), is the way out of this.  It is the politicians that are screwing up the solution because of power struggles and misguided ideologies that are holding back progress.  It takes cooperation and a strong will to tackle this huge issue.  I'm afraid the only way to rectify it is for everyone to work together hahaaaaa.   I am American by the way.

I know, way off topic

[Acharn]

1 minute ago, Redline said:

Thanks, I'm looking at the website now.  The crazy thing is, is that these huge and prolonged interventions by central banks has never been done before.  So, now we see a lot of unpredictability in many sectors, and no one knows how to play this game.  As, Bill Gross said yesterday, hard assets, gold, short term bonds and a few stocks are all that is looking good at this point.  The world's rich have been sweeping up hard assets like mad (art, real estate, diamonds...) for years, even inflating those assets.  There are still many opportunities in this area.

I certainly don't see Zimbabwe, and I would be surprised if we get 1 rate hike this year.  I do see a situation like Japan with no inflation.  Like the US before, and now the BOJ, and the ECB distorting bond values, it looks like it could lead to a disaster if worldwide rates drop much lower.  I believe, like many, that governmental investment (training programs, infrastructure, health and education, transportation, tax reform, social programs...), is the way out of this.  It is the politicians that are screwing up the solution because of power struggles and misguided ideologies that are holding back progress.  It takes cooperation and a strong will to tackle this huge issue.  I'm afraid the only way to rectify it is for everyone to work together hahaaaaa.   I am American by the way.

I know, way off topic

If Bill Gross said gold is looking good, you should figure he's lost the last of his marbles. He left PIMCO because he bet the farm that interest rates on long-term bonds were going to take off. He lost a bundle. 10-year treasuries were 1.46% the last time I looked. If you think central banks are distorting interest rates and asset prices, you are trying to say that markets don't work. The only interest rate the Federal Reserve controls is the "overnight rate," the rate they charge banks for short (overnight) term loans. That indirectly controls the "fed funds rate," the rate that banks charge each other, but bond prices and prices charged on mortgages and commercial loans are outside their control. I remember Alan Greenspan whining that the markets are wrong because interest rates didn't rise. Well, I think interest rates didn't rise because investors don't see any alternative safe investments. They want bonds. If the price of something is high you should produce more of it and sell it. Republicans prevented Treasury from issuing more bonds (increasing the deficit/national debt), so there's excess demand for bonds, so the price is high which means the yield is low. That's also contributing to keeping the dollar high, which keeps net exports negative and we have this huge outsourcing of demand to other countries, Germany, Japan, China. Sorry for ranting for so long. I'm very annoyed with what I see as right-wing lies about the source of our economic woes. Basically, it's neoliberal policies as implemented by both Republicans and Democrats.

[Redline]

29 minutes ago, Acharn said:

If Bill Gross said gold is looking good, you should figure he's lost the last of his marbles. He left PIMCO because he bet the farm that interest rates on long-term bonds were going to take off. He lost a bundle. 10-year treasuries were 1.46% the last time I looked. If you think central banks are distorting interest rates and asset prices, you are trying to say that markets don't work. The only interest rate the Federal Reserve controls is the "overnight rate," the rate they charge banks for short (overnight) term loans. That indirectly controls the "fed funds rate," the rate that banks charge each other, but bond prices and prices charged on mortgages and commercial loans are outside their control. I remember Alan Greenspan whining that the markets are wrong because interest rates didn't rise. Well, I think interest rates didn't rise because investors don't see any alternative safe investments. They want bonds. If the price of something is high you should produce more of it and sell it. Republicans prevented Treasury from issuing more bonds (increasing the deficit/national debt), so there's excess demand for bonds, so the price is high which means the yield is low. That's also contributing to keeping the dollar high, which keeps net exports negative and we have this huge outsourcing of demand to other countries, Germany, Japan, China. Sorry for ranting for so long. I'm very annoyed with what I see as right-wing lies about the source of our economic woes. Basically, it's neoliberal policies as implemented by both Republicans and Democrats.

Really, I'm not saying markets don't work.  I'm saying that they are not allowing them to work.  These interventions distort market forces.

How do you think the massive buying by the central banks affect the bond prices then?

I agree about gold for sure.

Edited August 4, 2016 by Redline

[pokerface1]

On 02/08/2016 at 8:18 PM, goatfarmer said:

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.

There's no doubt in my mind that the currency markets are manipulated as I have seen it done first hand. It's all preset into a network of currencies and if you didn't know better you would think that it was just the market forces impacting the currencies movement.

The currency market is point perfect which means you will not be able to trace any manipulation with knowing their tricks

 

[Acharn]

On 8/4/2016 at 5:44 PM, Redline said:

Really, I'm not saying markets don't work.  I'm saying that they are not allowing them to work.  These interventions distort market forces.

How do you think the massive buying by the central banks affect the bond prices then?

I agree about gold for sure.

Well, because of market forces, the Fed's buying of trillions of dollars worth of bonds raised the price of bonds, which lowers the interest rate. I guess that's what you mean by "not allowing them to work," but that's wrong. They are making use of the nature of markets to influence prices. General Electric and Microsoft do the same thing. See, my point of view is you seem to believe the Austrian economists, like von Hayek and von Mises. In my opinion they're nuts because they refuse to admit that it is possible to learn something from actual evidence. They believe the markets cannot fail, they can only be failed, and when there is a market failure (as with real estate backed derivatives) this is symptom of government interference and the only thing to do is make everybody go broke. Saying market forces are being "distorted" is saying markets don't work. The U.S. government should have run a deficit of at least $3 trillion in 2010 instead of turning to austerity. The excuse of "no shovel ready projects" is bullshit. There were no shovel-ready projects in 1933 either, but that didn't stop Harry Hopkins from recruiting three million unemployed people in four months.