Impact of expected US Fed interest rate rise.

[stament]

Just wondered if the above would have much impact on the thb rate if it were to occur as widely expected. 

 

I am guessing the market has already factored in a rate rise and we could even see a drop in the strength of the dollar or flat but of course I am hoping as always that the dollar will strengthe. ?

 

What rate to TV members expect the spot rate to move to if indeed an increase does occur?

 

 

[ezzra]

 

I need to move some AUD$ back home and I hope that the anticipated rise

in interests will get investors of the AUD$ to the greenback and government

bonds as the Aussie dollar is way to high at where the RBA wants it to be....

[YeahSiam]

The hike itself is mostly priced into the current exchange rate but the most important aspect of the decision will be Janet Yellen's comments in the post-decision news conference.

Markets will be paying particularly close attention to what the FOMC's outlook is for monetary "tightening" in 2017.

Last December, she said the Fed envisaged raising interest rates 3 or 4 times in 2016; we all know how that worked out.

 

Bear in mind that if the reaction to the rate hike is "sell the news" as is so often the case with long-awaited events like this, the dollar will pullback and the baht will likely strengthen.

[Berkshire]

7 hours ago, YeahSiam said:

The hike itself is mostly priced into the current exchange rate but the most important aspect of the decision will be Janet Yellen's comments in the post-decision news conference.

Markets will be paying particularly close attention to what the FOMC's outlook is for monetary "tightening" in 2017.

Last December, she said the Fed envisaged raising interest rates 3 or 4 times in 2016; we all know how that worked out.

 

Bear in mind that if the reaction to the rate hike is "sell the news" as is so often the case with long-awaited events like this, the dollar will pullback and the baht will likely strengthen.

 

I think you'd be right several months ago when an interest rate hike was expected.  But with so many false signals, the market may react more now if the feds do raise rates.  I think we'd see strengthening of the dollar in the short and medium term, and leveling off over the long term.  Regardless, it will be gradual.  We won't see 40 bt to the dollar any time soon.  The big question will be what happens during the Trump Administration. 

[stament]

guess we will see now....

[stament]

now we know ?

[gk10002000]

I have a lot of Bonds and bond funds.  Sure the general rule is for a standard bond of course the price or value of the bond you bought will drop as the interest rates rise because somebody can now pay what you originally did but now get a bond that pays a higher rate.  But if you hold the bond to maturity you don't lose anything.  Your bond still paid you xx %.  And if you own a bond fund, well the fund simply keeps buying new bonds and retiring old bonds so in general you probably will make more money in the long haul as higher paying bonds will replace the expiring or maturing lower rate bonds.  As far as currency exchange rate and interest effects, I don't think there is a strong correlation one way or the other.  the rates seem to be more driven by overall economic strengths.  that might not be true for countries that are economic powerhouses where a few percentage points in interest will drive people to move money from one currency to another.  I don't think Thailand fits into that category