Thai baht getting stronger and stronger

[Requiem]

During the past 2 years I have never seen thai baht so strong. It's ratio with EUR is at its highest point during those 2 years, which make me worry, as I get my salary in EUR.

 

Any predictions for its further course? Eventually I will have to exchange EUR to THB again in the beginning of November. I'm wondering if I should wait more or do it now and accept the extra 20-30 EUR loss.

 

What do you think guys?

[1FinickyOne]

I think if anyone could accurately predict currency fluctuations and any market fluctuations on a regular basis they will be quite wealthy. 

The values you see everyday are created by market factors, on a bid and asked basis - so, by definition, half the moneyed interests think it will go up and half think it will go down with the value settling at the mid point.

 

So, I think, nobody knows and if you are regularly in this position, you can sort of income average out by choosing a random day of each month to cash in or out... if you want to play at the game some, you might want to adjust the amounts you cash. But, nobody really knows tomorrows market value...

 

Good luck. 

[chiang mai]

The problem is not the Thai Baht getting stronger, the problem is the Euro and The Pound are getting weaker. You may want to read the following link which deals with the Pound/Baht but references the Euro frequently:

 

 

 

[IMA_FARANG]

I seriously believe that a  bank or a group of banks in Thailand is attempting to maintain the Thai Baht stronger aginst other international currencies durring this period of mourning [n Thailand by buying Baht and selling dollsrs and other international currencies.

The same could posssibly be true for the Pound and the Euro also.

Edited October 19, 2016 by IMA_FARANG
correct typo

[Kwasaki]

41 minutes ago, Requiem said:

I'm wondering if I should wait more

 

Just exchange what you need,  there won't be any significant gains for good while IMO,  don't be surprised if goes south more.

There maybe a change at the end of March next year but how it will go is anyone's guess.

[ubonjoe]

23 minutes ago, IMA_FARANG said:

I seriously believe that a  bank or a group of banks in Thailand is attempting to maintain the Thai Baht stronger aginst other international currencies durring this period of mourning [n Thailand by buying Baht and selling dollsrs and other international currencies.

The same could posssibly be true for the Pound and the Euro also.

Banks have no control over the exchange rates.

Only the Bank of Thailand can take action to control exchange rates (for example look at what happened in 1997).

[Anthony5]

32 minutes ago, chiang mai said:

The problem is not the Thai Baht getting stronger, the problem is the Euro and The Pound are getting weaker. You may want to read the following link which deals with the Pound/Baht but references the Euro frequently:

 

 

 

 

 

No it's not, because pound has in the past few days strengthened against US$ and both US$ and GBP have fallen against the THB during the same time

[Strange]

7 minutes ago, Anthony5 said:

both US$ and GBP have fallen against the THB during the same time

 

USD -THB 34.90'ish right now, and has only really fluctuated like 30-40 satang. GBP has taken a dump compared to USD steadily for weeks and anything showing strengthening is merely a fluctuation. 

[Anthony5]

4 minutes ago, Strange said:

 

USD -THB 34.90'ish right now, and has only really fluctuated like 30-40 satang. GBP has taken a dump compared to USD steadily for weeks and anything showing strengthening is merely a fluctuation. 

  GBP-USD was 1.2150 on the 17th, while it was like 43.30 against the Baht on that day.

 

Today GBP-USD is 1.2293 while it is 42.90 against the Baht. The Dollar has gone from 35.30 to 34.89.

 

Euro has declined against USD since Monday, so we can say that it's normal that Euro should have declined against Baht, only the decline against Baht is bigger than against Dollar and all other currencies have also declined against Baht.

[onthesoi]

Everything is relative, including currency value.

 

The strength of a currency is defined solely by the exchange rate against other curriencies.

 

...ergo the baht is currently strong.

 

 

Edited October 19, 2016 by onthesoi

[chiang mai]

2 hours ago, Anthony5 said:

 

 

No it's not, because pound has in the past few days strengthened against US$ and both US$ and GBP have fallen against the THB during the same time

 

Those moves that you're referring to were not more than one cent, typical intra day trading volatility perhaps augmented by some effect of the recent death. USD/THB has traded in a narrow band from 34.45 to 35.53 for the past 30 days - GBP/USD also has operated in a range of 1.215 to 1.225 for the past ten days, that notwithstanding that GBP is on it's way down over the longer term.

[Berkshire]

I would think everyone would understand by now that the value of the baht has more to do with the economies of your home currency than it does with what's going on in Thailand.  That's why the UK pound got hammered after the Brexit.  I don't believe the baht is particularly strong right now, considering that I've seen the USD under 30 a few years ago. 

 

I don't check currency rates closely, but did notice the THB:USD fluctuating wildly as of late.  Seemed like it was poised to hit 36 just last week, but now it's under 35 again.  I don't worry about the USD too much, especially since the US Fed will definitely raise interest rates soon.  The USD is in good shape in the short and medium term. 

[chiang mai]

There is some evidence that BOT may have been intervening in the markets to smooth out the peaks and troughs but they've always done that. Look at the weekly reserves and compare them over several weeks:

 

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

[Berkshire]

8 minutes ago, chiang mai said:

There is some evidence that BOT may have been intervening in the markets to smooth out the peaks and troughs but they've always done that. Look at the weekly reserves and compare them over several weeks:

 

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

 

That's the only intervention the BOT would be engaged in, and it's only to minimize volatility.  They're not in the business of picking winners and losers, which is the case with whether the baht goes up or down.

[nontabury]

9 minutes ago, chiang mai said:

There is some evidence that BOT may have been intervening in the markets to smooth out the peaks and troughs but they've always done that. Look at the weekly reserves and compare them over several weeks:

 

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

 

For once I have to agree with you. Exactly the same may be said regarding some countries intervening to make sure the £ goes low,in order to punish the British electorate and to try and reverse Britex.

[elgordo38]

Last time I went shopping they did not seem to be doing very good on the inflation front. The bags boxes of everything seem to get lighter in weight and carry a larger price tag. Its the old shell game played by all governments. All this low inflation crap is a bunch of baloney. It is meant to keep interest rates low thus the interest on the debt is low, increases in wages are held in check, no interest on your saving COLA at zero. The governments world wide are waging a war on pensioners savers the downtrodden while their big business buddies stick it to us. Thanksgiving is coming soon and your the turkey.  

[chiang mai]

26 minutes ago, nontabury said:

 

For once I have to agree with you. Exactly the same may be said regarding some countries intervening to make sure the £ goes low,in order to punish the British electorate and to try and reverse Britex.

 

The same may only be said by delusionists who don't have a clue about economics, that's mostly all of your crowd as far as I can tell!

[jpinx]

For a real comparison ....

[chiang mai]

The third one down is the Pennines, don't know what the others are!

[elgordo38]

3 minutes ago, chiang mai said:

 

The same may only be said by delusionists who don't have a clue about economics, that's mostly all of your crowd as far as I can tell!

Economics 101. Cut interest rates to zero or minus zero and the currency follows down a double loose loose situation. What follows this procedure almost zero rates at the banks consumers go on a borrowing binge. Banks cannot make any money lending at low rate and a Deustche bank situation is created. Banks then get creative like Wells Fargo to bolster earnings (I am sure many more await discovery on creative shenanigans like the VW debacle) then the apologies flow and small fine is slapped on them and a few heads roll and then its back to business as normal. You the banks customers are the loser.  These are definitely companies whose stocks you should buy on the dips in your retirement funds. Just be careful the dip could be like a water slide. 

[connda]

It might be that other currencies are getting weaker and weaker.

[Laza 45]

Absolutely right...  The Aussie $ has been getting stronger against the Bt.. while the Euro & UK pound have been falling...  I read somewhere recently that the currency fluctuation of the Quid & the Euro (and other currencies as well) are generally influenced by financial indicators... now they seem to be following political mood.. Brexit worries of course.. but also uncertainty about where Italy.. and perhaps Portugal are heading..  uncertain times...

[hanssna]

I wish I knew, haha  

[mfd101]

For those interested in improving my finances by buying Aussie dollars, the Oz has been slowly rising against just about all currencies for the last 12 months (including the Baht & the US dollar, awa Pound & Euro), and in some cases for 2 years. There have been many ups & downs around the trend line but I feel sure that you would profit from getting in there now and buying Oz. It would certainly be good for me ...

[AlfonsV]

OP : "During the past 2 years I have never seen thai baht so strong."

I do not know on which facts this statement is based or just on a superficial personal feeling.

 

It does not correspond to the charts I get at https://www.oanda.com/lang/de/currency/historical-rates/

During the last 2 years there were 2 higher peaks, in October 2014 and in October 2015.

And the 5 years period shows that THB was again much higher vs Euro from summer 2013 till summer 2014.

 

[Thaidream]

The Baht is gaining strength because  there is intervention in the currency markets by both the Thai central bank and various banks propping up the Baht as investors have withdrawn a large amount of funds from Thailand due to the recent event. The Baht is overvalued and will eventually settle into a stable range unless the BOT  wants to change that range for political reasons.

The UK pound is way undervalued because of Brexit- but once this is settled the Pound will come back because the Uk economy is much  better than the rest of Europe using the Euro. The UK was smart never to have adopted the Euro. The Euro will decline once the UK leaves the Union and others may then join the exodus. Europe except Germany is not sound in the long term.

 

The US dollar will remain relatively stable until the fed raises interest rates and then head upwards. However if Donald Trump becomes President (God forbid!) then all bets are off. There will be a rapid dollar decline and possibly a Worldwide recession. However, if Hillary Clinton becomes President the Dollar will continue its rise.

I am no currency expert but have many decades of watching how currencies rise and fall and why .

 

[chiang mai]

18 minutes ago, Thaidream said:

The Baht is gaining strength because  there is intervention in the currency markets by both the Thai central bank and various banks propping up the Baht as investors have withdrawn a large amount of funds from Thailand due to the recent event. The Baht is overvalued and will eventually settle into a stable range unless the BOT  wants to change that range for political reasons.

The UK pound is way undervalued because of Brexit- but once this is settled the Pound will come back because the Uk economy is much  better than the rest of Europe using the Euro. The UK was smart never to have adopted the Euro. The Euro will decline once the UK leaves the Union and others may then join the exodus. Europe except Germany is not sound in the long term.

 

The US dollar will remain relatively stable until the fed raises interest rates and then head upwards. However if Donald Trump becomes President (God forbid!) then all bets are off. There will be a rapid dollar decline and possibly a Worldwide recession. However, if Hillary Clinton becomes President the Dollar will continue its rise.

I am no currency expert but have many decades of watching how currencies rise and fall and why .

 

 

A few points:

 

Only the Central bank can influence the value of THB, individual banks cannot.

 

There is probably some intervention by BOT to smooth out the peaks and valleys but they've always done this to help exporters.

 

THB is undervalued, that's the opposite of overvalued, that's why it keeps on rising. Why is it undervalued? Because the economy of Thailand is in far better shape than many economies in the West and that's why it will almost certainly post a 3.2% GDP this year, ergo, investors buy THB and it continues to rise.

 

 

[Berkshire]

24 minutes ago, Thaidream said:

The US dollar will remain relatively stable until the fed raises interest rates and then head upwards. However if Donald Trump becomes President (God forbid!) then all bets are off. There will be a rapid dollar decline and possibly a Worldwide recession. However, if Hillary Clinton becomes President the Dollar will continue its rise.

I am no currency expert but have many decades of watching how currencies rise and fall and why .

 

 

This I can agree with.  If Trump becomes President (God forbid), not only will the USD crater, but so will the US stock market.  That would suck.

[Thaidream]

Actually, the central bank relies many times on a countries commercial banks to support  a currency to hide intervention. This happens frequently in Thailand.

In regard to undervalued or overvalued- I would disagree- the Thai Baht is too high based upon the actual fundamentals of the economy. The GDP figure is poor for a developing country- look at the countries surrounding Thailand and also China.

The reason the Baht is relatively strong is the fact that investors have been going into the Thai stock market at various times with large infusions of foreign currencies but they can also pull out quickly which  the weeks events have shown. This is where the central bank and commercial banks come into play to stabilize the currency.

Thailand is a good bet long term because it has a good base for investment and a relatively stable political system. The longer the military remains in power and solidifies that stability the better it looks to investors.

 

[yogi100]

7 hours ago, chiang mai said:

The problem is not the Thai Baht getting stronger, the problem is the Euro and The Pound are getting weaker. You may want to read the following link which deals with the Pound/Baht but references the Euro frequently:

 

 

 

 

I remember it being 32 baht in April '84.