Baht Likely To Strengthen To 35 To Dollar

[george]

Baht likely to strengthen to 35 to dollar in early 2007: KRC

BANGKOK: -- The Thai baht is projected to strengthen to 35 to the US dollar in the first half of next year since the Thai economy is likely to continue to grow satisfactorily while the United States economy is set to slow down, according to Thailand's Kasikorn Research Centre.

Reporting on a research work on "Baht Appreciation: Who Gains and Loses," the leading Bangkok think tank said the baht continued to appreciate due to a capital inflow and increased confidence in Thailand's economic and political development.

The strengthening of the baht also stemmed from mounting concerns by money dealers regarding the US economy and the dollar movement.

In particular, the US gross domestic product is expected to slow down to such an extent that the Federal Reserve might decide to cut key interest rates.

Additionally, money dealers believe that the baht could appreciate further because it had strengthened less than other regional currencies in the post-crisis period.

This opinion could fuel the baht's appreciation next year, particularly if the economy would expand more satisfactorily than that of this year and the political situation could ease and develop satisfactorily.

Under the circumstance, the baht would probably appreciate to touch 35 to the dollar in the first half of next year and might close and hover around 35-36 to the dollar at the end of the year.

KRC said food exports and processed farm products would be most adversely affected by the baht appreciation.

In contrast, imports of high technology-based products and outbound tourism as well as businesses with foreign currency-denominated debts would benefit from the stronger baht.

To brace for the baht volatility, KRC suggested exporters count on risk management approaches and tools to hedge against the currency fluctuation.

--TNA 2006-12-06

Latest currency exchange rates:

http://www.thaivisa.com/exchange_rates.0.html

Currency converter:

http://www.thaivisa.com/currency_converter.0.html

[ray23]

OK but what happens when the short term money pulls out?

[Artisi]

What are we talking about - it's already 34 - 35 to $US today. Great prediction.

[Jai Dee]

Baht strength may cut rice export competitivity

BANGKOK, Dec 6 (TNA) - The strengthening of the baht, if allowed to continue unabated, will reduce the competitiveness of Thai rice exports and make rice growers unable to sell paddy at an attractive price abroad.

Chukiart Opaswong, President of the Rice Exporters' Association, warned that the continued appreciation of the baht will have an adverse impact on farm products, particularly rice, because they are local raw materials, not import contents.

Although it is difficult to contain the currency volatility, he said, he wanted state agencies concerned to accelerate their finding measures to curb the current speculation in Thai currency by hedge funds.

"I feel surprised that the baht has appreciated by more than 15 per cent in the past two months while the US dollar has weakened slightly," he said..

"The strengthening of the baht will definitely affect prices of farm products including rice because they are local raw materials, not imported ones," he said.

Mr Chukiart said rice exporters would experience greater difficulty in marketing if the baht continued to strengthen because the product is now not competitive in terms of price.

He said he wanted state agencies concerned to oversee the baht to ensure it is not too volatile and to give information on the baht value to the private-sector companies.

He added that rice exports this year are likely to reach no less than 7.5 million tonnes as earlier projected.

Next year, he believed, Thai farm products will enjoy higher export growth since there are many natural disasters around the world, requiring more international purchases.

However, he conceded the continued baht appreciation would make Thailand earn less revenue and affect farmers' capability to sell products.

Source: TNA - 6 December 2006

[pjallittle]

What are we talking about - it's already 34 - 35 to $US today. Great prediction.

Looks like the so called Economic Think Tank needs to polish their crystal ball, it sure isn't serving them very well, is it?

The article is a classic case of DOA, i.e., dead on arrival.

[Fletcher]

Given that the USD is weakening against most currencies, not a huge risk of credibility for the think-tank to make such a prediction!

Predictions on how the Baht fares against the EURO, GBP, YEN, would be far more incisive.

[john b good]

Given that the USD is weakening against most currencies, not a huge risk of credibility for the think-tank to make such a prediction!

Predictions on how the Baht fares against the EURO, GBP, YEN, would be far more incisive.

What with the baht "supposedly" strengthing I don't see anything (imported that is) getting any cheaper.

[basjke]

What are we talking about - it's already 34 - 35 to $US today. Great prediction.

Looks like the so called Economic Think Tank needs to polish their crystal ball, it sure isn't serving them very well, is it?

The article is a classic case of DOA, i.e., dead on arrival.

You must be trading on a differnt market because I see it today still at 35.61 to the dollar.

By the way it isn't the baht strenghtening it's the dollar weakening.Watch the rate baht/euro,no major changes in the pst month or so.On the contrary the baht weakened little against the euro.

[rcys]

You must be trading on a differnt market because I see it today still at 35.61 to the dollar.

By the way it isn't the baht strenghtening it's the dollar weakening.Watch the rate baht/euro,no major changes in the pst month or so.On the contrary the baht weakened little against the euro.

Baht / USD exchange rate as of today, 6th is 35.91 per visa, so if you take money out of a PLUS/Visa system ATM that is the rate that you should get. Unfortunately, I've gotten different rates at times from Visa than their published rates when they withdraw it from my bank.

[basjke]

You must be trading on a differnt market because I see it today still at 35.61 to the dollar.

By the way it isn't the baht strenghtening it's the dollar weakening.Watch the rate baht/euro,no major changes in the pst month or so.On the contrary the baht weakened little against the euro.

Baht / USD exchange rate as of today, 6th is 35.91 per visa, so if you take money out of a PLUS/Visa system ATM that is the rate that you should get. Unfortunately, I've gotten different rates at times from Visa than their published rates when they withdraw it from my bank.

How do you know the exchange rate straith away when you withdraw from an atm?I will always have to wait for my monthly statement to know the exchange rate.

[Nemo.]

Given that the USD is weakening against most currencies, not a huge risk of credibility for the think-tank to make such a prediction!

Predictions on how the Baht fares against the EURO, GBP, YEN, would be far more incisive.

Well USD main concern as Thailand exports heaviy to US and USD "linked currencies" - but some of these are not so strong so ecen exports to Malaysia are looking expensive (India, Sri Lanka, Indonesia etc etc)

Main problem is the American consumer is spending more and more Japanese money! americans are becoming fat and lazy and productivity from labour are not matching increase in spending. Americans dont save and are using credit cards too much.

There is a global effect discussed a lot recently - called "the screwing of the middle classes by capital" effect. Company profits are soaring as return on capital is high. Yet middle class salaries are stagnant as jobs move abroad putting pressure on salary increases. Seems the theorists believe until the third world catches up with the first world the middle classes will be screwed by globalisation

Only solutions are

1. Have <deleted> loads of capital and laugh everytime the divi cheque arrives

2. Get a job in the third world (like Thailand) and teach English...... ie run away!

[hotgeekus]

"Main problem is the American consumer is spending more and more Japanese money! americans are becoming fat and lazy and productivity from labour are not matching increase in spending. Americans dont save and are using credit cards too much."

Maybe look outside before you speak. Americans have been fat for twenty years. They have always used those credit cards. In USA, in the last 30 years, to fuel the excess, the wife now works fulltime, along with the husband, paying for those expenses and now living outside their means.

If you think USA is bad, come look at Thailand. Secretary makes 1/4 the pay, works 2 times the hours and buys the same Chevy as in USA. How does she afford this, credit! It is redicious the amout of spending these people have for what they earn. In USA, there is ZERO public transportation (exception of Chicago, NYC, couple others) and don't need a car. In BKK you have the busses, skytrain, subway, but that is too expensive, rather buy a car for 1/2 million baht?

Nice try my friend, but wake up and smell the coffee (even if from Starbucks). USA no longer runs the world economy, that is the only answer.

[Kaojai]

How do you know the exchange rate straith away when you withdraw from an atm?I will always have to wait for my monthly statement to know the exchange rate.

It should be posted to your account in a day or two, so you check your account on the Internet to see how much you were charged in your currency. Of course, some card companies add extra charges for foreign transactions and that may only show up at the end of the month.

[chuchok]

Next year, he believed, Thai farm products will enjoy higher export growth since there are many natural disasters around the world, requiring more international purchases.

So the Thai Ag Export is now relying on natural disasters?

[dvk1951]

Given that the USD is weakening against most currencies, not a huge risk of credibility for the think-tank to make such a prediction!

Predictions on how the Baht fares against the EURO, GBP, YEN, would be far more incisive.

What with the baht "supposedly" strengthing I don't see anything (imported that is) getting any cheaper.

Yup, I see the term 'strengthening' as a definite mismomer, the baht has been hanging around 70/GBP during the dollar tumble and no 'strengthening' in site, same same for the other global currencies.

As others have stated, a no-brainer to predict the weakening of the USD and the subsequent ripples on the baht.

[Foggy Bottom]

Given that the USD is weakening against most currencies, not a huge risk of credibility for the think-tank to make such a prediction!

Predictions on how the Baht fares against the EURO, GBP, YEN, would be far more incisive.

What with the baht "supposedly" strengthing I don't see anything (imported that is) getting any cheaper.

Oh I dunno - up here, tourists certainly are

Quality has dropped through the floor judging by the number of sleeveless vests and shorts drifting around after dark

[hardy1943]

From 1980-- 1996 the Baht was 25 to the US Dollar

1948 -- 1980 the Baht was 20 to the US Dollar

The US Dollar has been overvalued for many years and the lower US Dollar makes

the US more competitive in the global market. We Americans living in foreign countries feel the pinch. People living in the US could not care less.

[chiang mai]

What are we talking about - it's already 34 - 35 to $US today. Great prediction.

Looks like the so called Economic Think Tank needs to polish their crystal ball, it sure isn't serving them very well, is it?

The article is a classic case of DOA, i.e., dead on arrival.

What are we talking about - it's already 34 - 35 to $US today. Great prediction.

Looks like the so called Economic Think Tank needs to polish their crystal ball, it sure isn't serving them very well, is it?

The article is a classic case of DOA, i.e., dead on arrival.

You must be trading on a differnt market because I see it today still at 35.61 to the dollar.

By the way it isn't the baht strenghtening it's the dollar weakening.Watch the rate baht/euro,no major changes in the pst month or so.On the contrary the baht weakened little against the euro.

You must be trading on a differnt market because I see it today still at 35.61 to the dollar.

By the way it isn't the baht strenghtening it's the dollar weakening.Watch the rate baht/euro,no major changes in the pst month or so.On the contrary the baht weakened little against the euro.

Baht / USD exchange rate as of today, 6th is 35.91 per visa, so if you take money out of a PLUS/Visa system ATM that is the rate that you should get. Unfortunately, I've gotten different rates at times from Visa than their published rates when they withdraw it from my bank.

How do you know the exchange rate straith away when you withdraw from an atm?I will always have to wait for my monthly statement to know the exchange rate.

Currency exchange rates have two factors, a "bid" price and an "ask" price (buy and sell) - the median of those two is regarded as the official exchange rate for that currency on the International Foriegn Exchange (Forex) Markets. Today the bid/ask price is 35.60 and 35.70 and these are the rates that you will get if you buy/sell through the Int. Forex. But go to an exchange kiosk at a Thai Bank and you will see slightly different rates because they want to take a bigger margin hence the spread between buy and sell is larger. Go to a UK bank or an LHR Travelex and the spread will be horrendous, take a cash withdrawal on your Visa card or similar and the true cost or spread will likely be even greater still.

I think the message is clear, if you want to trade currency do so in cash and do so in Asia where the spread is always the smallest.

[tracker]

It is time for Thailand to adopt the self sustaining economy which their King is promoting for years....

[Jai Dee]

Thai c.bank to watch baht before any further action

BANGKOK, Dec 6 (Reuters) - Thailand's central bank will watch the impact of its measures to prevent speculation in the baht before deciding whether further action is needed, Governor Tarisa Watanagase said on Wednesday.

"If we are unhappy with the results of the measures, we have some more prepared. Taxing is an option, but there are also other actions that the central bank is empowered to take. I cannot talk about them now or they would know all our cards," Tarisa said.

The baht, the fastest rising Asian currency against the dollar this year with a rise of more than 15 percent, largely moved in line with other Asian currencies on Wednesday, she told reporters.

It hovered at around 35.61 per dollar at 0534 GMT, down from an 8-year high of 35.54 late on Tuesday.

"We cannot look at it for just one day. From what I can gather, the market has gradually absorbed the measures and it is adjusting direction," she said.

"Some transactions take time to be concluded. We will monitor them and will not rush to any conclusion."

On Monday, the Bank Of Thailand announced measures aimed at stopping non-residents from speculating on the baht, but dealers said they had very little immediate impact.

It said financial institutions were being asked to refrain from undertaking "sell and buy back" transactions of all maturities with non-residents.

Financial institutions would be allowed to deal with foreigners on assets only if the foreigners planned to hold them for at least three months, it said.

It also said financial institutions would no longer be allowed to borrow baht from non-residents, including through sell-buy swap transactions, if there was no underlying trade or investment and the swap maturity was less than 6 months, up from three months previously.

"This in effect means that the onshore forward market is closed for offshore players who want to sell USD-THB for forward expiries of less than 6 months," Shahab Jalinoos of ABN Amro said in a research note to clients on Tuesday.

Source: Reuters - 6 December 2006

[Acharn]

From 1980-- 1996 the Baht was 25 to the US Dollar

1948 -- 1980 the Baht was 20 to the US Dollar

The US Dollar has been overvalued for many years and the lower US Dollar makes

the US more competitive in the global market. We Americans living in foreign countries feel the pinch. People living in the US could not care less.

This year they couldn't care less, for the last five years they couldn't care less, but in a couple of years they'll be caring when they can't afford those cheap Chinese clothes any more. I blame Bush's economic policies (more for the rich) for the mounting disaster. The housing market has already stalled, and if it drops disastrously next year we could see the dollar going to 25 baht.

[BigSnake]

Given that the USD is weakening against most currencies, not a huge risk of credibility for the think-tank to make such a prediction!

Predictions on how the Baht fares against the EURO, GBP, YEN, would be far more incisive.

What with the baht "supposedly" strengthing I don't see anything (imported that is) getting any cheaper.

Yup, I see the term 'strengthening' as a definite mismomer, the baht has been hanging around 70/GBP during the dollar tumble and no 'strengthening' in site, same same for the other global currencies.

As others have stated, a no-brainer to predict the weakening of the USD and the subsequent ripples on the baht.

Yeah!! bad news for some.

[sensei]

You must be trading on a differnt market because I see it today still at 35.61 to the dollar.

By the way it isn't the baht strenghtening it's the dollar weakening.Watch the rate baht/euro,no major changes in the pst month or so.On the contrary the baht weakened little against the euro.

Baht / USD exchange rate as of today, 6th is 35.91 per visa, so if you take money out of a PLUS/Visa system ATM that is the rate that you should get. Unfortunately, I've gotten different rates at times from Visa than their published rates when they withdraw it from my bank.

How do you know the exchange rate straith away when you withdraw from an atm?I will always have to wait for my monthly statement to know the exchange rate.

you could walk into the bank and ask

or just check it online

http://finance.yahoo.com/currency/convert?...;submit=Convert

its updated regularly.

just a minute ago, it was 35.660 baht to the dollar.

[wolfmanjack]

From 1980-- 1996 the Baht was 25 to the US Dollar

1948 -- 1980 the Baht was 20 to the US Dollar

The US Dollar has been overvalued for many years and the lower US Dollar makes

the US more competitive in the global market. We Americans living in foreign countries feel the pinch. People living in the US could not care less.

This year they couldn't care less, for the last five years they couldn't care less, but in a couple of years they'll be caring when they can't afford those cheap Chinese clothes any more. I blame Bush's economic policies (more for the rich) for the mounting disaster. The housing market has already stalled, and if it drops disastrously next year we could see the dollar going to 25 baht.

How right you are. The last 5 years they couldn't care less cause the $ was strong. Now my customers that pay in baht are complaining already. Those that pay in $ have not started yet since the companies in Thailand are just now adjusting their prices to reflect the change. Some of my customers require a 3 month notice of any price changes and will not go along with monthly changes so we have to factor in what we think the exchange rate will be 6 months from now. Also don't forget that many companies have at least a 6 time markup and many 10 or 11 times.

The orders for the spring season are already finished and the orders for the summer season have already been placed but by next fall and xmas should see the higher prices in the stores. The american consumer will start seeing a major drop in their buying power. Remember not much is produced in the USA any more. Even the factories that so still assemble in the USA get most of their parts from abroad.

[Martin]

When the growing problems in the US economy start to bite, the pound and euro will be affected, as the European economies have some major links to the US economy.

In the longer term, it is the coming rise in the price of food that causes the biggest worry for all nations that are importers, and/or where what they grow depends on inorganic fertilised, which is getting very expensive. Thailand is not so much hit by that. Traditionally, it has exported a lot of food and imported very, very little.

What we are seeing now, reflected in the US dollar, is the waning of industrialism. Every country will be hurt, but some less than others. Proportionately, Thailand is less highly-industrialised than the West, so it looks as if it may not suffer as badly as many.

Put crudely, an individual family's economy is a matter of what food and shelter and extras they can afford from their income, after deducting the expenses of earning the income. The 'nasties' for many families in the West are, first , the rise in the heating costs for the 'shelter' and, secondly the rise in the costs of travel to work (particularly from suburbs). When food prices go up, too, there will be little available for 'extras'---and that will hit GDPs.

Those of us who are living in Thailand should thank our lucky stars!

[chiang mai]

When the growing problems in the US economy start to bite, the pound and euro will be affected, as the European economies have some major links to the US economy.

In the longer term, it is the coming rise in the price of food that causes the biggest worry for all nations that are importers, and/or where what they grow depends on inorganic fertilised, which is getting very expensive. Thailand is not so much hit by that. Traditionally, it has exported a lot of food and imported very, very little.

What we are seeing now, reflected in the US dollar, is the waning of industrialism. Every country will be hurt, but some less than others. Proportionately, Thailand is less highly-industrialised than the West, so it looks as if it may not suffer as badly as many.

Put crudely, an individual family's economy is a matter of what food and shelter and extras they can afford from their income, after deducting the expenses of earning the income. The 'nasties' for many families in the West are, first , the rise in the heating costs for the 'shelter' and, secondly the rise in the costs of travel to work (particularly from suburbs). When food prices go up, too, there will be little available for 'extras'---and that will hit GDPs.

Those of us who are living in Thailand should thank our lucky stars!

Not quite so I'm afraid. The US does not need to import or export hence it is a self sustaining economy in that respect. Thailand on the other hand is a net exporter and relies on exports for much of its GDP. So in the worst case scenario the US could batten down the hatches and still be okay whilst Thailand and many other Asian countries would find their exports too expensive for the US market. I ask you, what would Thailand do if they could not export simply because the dollar/baht rate was say 15 or baht to the dollar (for example). The answer is seriously bad news for the Thai economy and its people. Take that logic one step further and consider the impact on China's huge dollar debt. China, given that scenario has the potential to become the worlds largest debtor. In summary, the impact of a waning dollar is bad news for everyone, not just the West.

[basjke]

You must be trading on a differnt market because I see it today still at 35.61 to the dollar.

By the way it isn't the baht strenghtening it's the dollar weakening.Watch the rate baht/euro,no major changes in the pst month or so.On the contrary the baht weakened little against the euro.

Baht / USD exchange rate as of today, 6th is 35.91 per visa, so if you take money out of a PLUS/Visa system ATM that is the rate that you should get. Unfortunately, I've gotten different rates at times from Visa than their published rates when they withdraw it from my bank.

How do you know the exchange rate straith away when you withdraw from an atm?I will always have to wait for my monthly statement to know the exchange rate.

you could walk into the bank and ask

or just check it online

http://finance.yahoo.com/currency/convert?...;submit=Convert

its updated regularly.

just a minute ago, it was 35.660 baht to the dollar.

What you mention are currency cross rates between banks,not the rates you get when exchanging notes or withdrawing from atm machines.The rates you are charged from visa or the local exchange office are quite a bit different.

[BlackArtemis]

Well I just decided against the purchase of a house here so I won't be transfering a big amount of $ for now. I just gotta home in 1-2 years its closer to 38 baht per dollar. Else I will have to buy a crapload of levis and mp3 players to sell here for baht!

[Miami Bob]

Given that the USD is weakening against most currencies, not a huge risk of credibility for the think-tank to make such a prediction!

Predictions on how the Baht fares against the EURO, GBP, YEN, would be far more incisive.

What with the baht "supposedly" strengthing I don't see anything (imported that is) getting any cheaper.

Yup, I see the term 'strengthening' as a definite mismomer, the baht has been hanging around 70/GBP during the dollar tumble and no 'strengthening' in site, same same for the other global currencies.

As others have stated, a no-brainer to predict the weakening of the USD and the subsequent ripples on the baht.

I heard them talking on Bloomberg the other day that Dec. is traditionally a weak month for the US dollar then it usually begins to recover in Jan. My friend subscribts to an investment newsletter that is telling him to buy dollars now. Good sign. I doubt that the dollar will stay down for to... long. The USA is still the biggest market for the rest of the worlds exports so other governments don't want to see the dollar get to weak. Here's hoping it turns around sooner than later .... this is cutting into my party money !

[cutter007]

Most of the people here (including the person that wrote that article) are lacking a basic macroeconomic education, which is no big deal since most of the worlds population couldn't even tell you what the word means. Most of the stuff on here about American’s being lazy and crap like that maybe true but it doesn't have anything to do with short term dollar fluctuations.

Actually the reason why the dollar has weaken dramatically is largely attributed to the US federal reserves interest rate hikes on the 90 day T-Bill, or what is referred to as the risk free rate. T-Bills are the securities that the commercial banks trade on a daily basis to control their debt ratios.

Basically, when they raise the risk free rate, this makes the dollar more expensive to borrow, thus lowering its value comparative to other currencies, ie it looks like the baht has gained in value.

The federal reserve controls most short term dollar value fluctuations, things like America falling behind or their economy weakening are things that devalue the dollar over the long term, not a period of 6 months or a year.

Here is the link the Bank of Thailand’s (Thailand’s head bank) currency rates http://www.bot.or.th/bothomepage/databank/.../exchange_e.asp

...............I love people that try to trash talk the US any chance they get......quote from Tony Blair..........."A simple way to take measure of a country is to look at how many want in ... And how many want out."

Edited December 6, 2006 by cutter007