Exchange rate baht/sterling falls again - why?

[simoh1490]

1 minute ago, hugh2121 said:

Still doesn't answer the OP's question. I only tried to point out that the THB is not only rising against GBP. However, one thing you seem to have neglected is possible interference from the BOT e.g. buying THB.

Show us how they could do that, which funds would they use.

Edited May 30, 2017 by simoh1490

[hugh2121]

Just now, simoh1490 said:

Show us how they could do that, which funds would they use.

Credit

[simoh1490]

Just now, hugh2121 said:

Credit

So they would borrow USD, on credit, sell that USD and buy THB thus causing the THB to strengthen?

 

And how do they repay the USD loans, with what from where?

[Laza 45]

12 minutes ago, hugh2121 said:

Still doesn't answer the OP's question. I only tried to point out that the THB is not only rising against GBP. However, one thing you seem to have neglected is possible interference from the BOT e.g. buying THB.

... I don't know if BOT is buying Bt to prop up the currency..  a report I saw today says that they are limiting short term ..3 or 6 months to maturity bonds to discourage short term speculation.. that seems to run counter to the thought that they are buying Bt to support the currency..  a lower Bt is good for exports.. and that is the main game.. I think... 

[simoh1490]

Tourists buy baht, exporters get their export bills settled in USD which they then sell to buy baht, foreign investors and hot money buys baht.....you see the currency strengthening problem when two of the key contributors to GDP, tourism and exports, both involve buying local currency.

[theslime]

The OP blames corbyns Trainwreck for money woes.    As  Corbyn hasn,t been driving the Train maybe you should look closer to home for your money woes, like inside your head.

[metisdead]

A post containing a link to Bangkok Post has been removed:

 

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[Laza 45]

1 hour ago, metisdead said:

A post containing a link to Bangkok Post has been removed:

 

26) The Bangkok Post and Phuketwan do not allow quotes from their news articles or other material to appear on Thaivisa.com. Neither do they allow links to their publications. Posts from members containing quotes from or links to Bangkok Post or Phuketwan publications will be deleted from the forum.
 

..didn't know that... 

 

[George Feedback]

14 hours ago, simoh1490 said:

On the contrary, the easiest part to understand is the strength of THB which is backed by solid fundamentals, low governement debt and hi levels of foreign currency reserves.

 

As for GBP: it remains at the bottom of the stack of valuable currencies and has the potential to go much lower if the election and Brexit don't go as hoped - and that's not remoaning/brexiteering, that's fact. https://www.bloomberg.com/news/articles/2017-01-11/the-three-worst-currencies-of-2017-show-that-politics-not-economics-are-driving-markets

Bloomberg is a German news service...

[simoh1490]

5 hours ago, George Feedback said:

Bloomberg is a German news service...

Wake up and get with the times!!!! Bloomberg is owned by Michael Bloomberg and is an American company, not that has anything whatsoever to do wit the point the article makes!

[KarenBravo]

I believe that the Thai Baht is tied to a basket of ten currencies, mainly consisting of it's main trading partners currencies.

If any of these currencies appreciate, then the Thai Baht will also appreciate, though, to a lesser extent.

The Thai government has never published exactly which currencies make up this basket.

Edited May 30, 2017 by KarenBravo

[simoh1490]

Just now, KarenBravo said:

I believe that the Thai Baht is tied to a basket of ten currencies, mainly consisting of it's trading partners currencies.

If any of these currencies appreciate, then the Thai Baht will also appreciate, though, to a lesser extent.

The Thai government has never published exactly which currencies make up this basket.

Those currencies are determined by SDR (also known as XDR) rules of the IMF:

 

"The value of the XDR is based on a basket of key international currencies reviewed by IMF every five years.^[3] The weights assigned to each currency in the XDR basket are adjusted to take into account their current prominence in terms of international trade and national foreign exchange reserves.^[3] In the review conducted in November 2015, the IMF decided that the Renminbi (Chinese yuan) would be added to the basket effective October 1, 2016.^[6] From that date, the XDR basket now consists of the following five currencies: U.S. dollar 41.73%, Euro 30.93%, Renminbi (Chinese yuan) 10.92%, Japanese yen 8.33%, British pound 8.09%.^[7]"

https://en.wikipedia.org/wiki/Special_drawing_rights

 

"2/ Starting October 2016, international reserves include currency that has been added to the calculation of the SDR basket. (For more detail, please refer to the IMF definition of the SDR basket" http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=80&language=ENG

 

[sandyf]

On 5/27/2017 at 10:16 PM, trd said:

Currencies are in pairs. The pound is rising against the US dollar, but the baht is rising against the pound and other currencies. It is baht strength not pound weakness over the last few days.

Not entirely true. The pound has weakened against the dollar without any strengthening of the dollar index, this is reflected in a weakening of the pound against the Euro.

The slide in the pound is a result of the recent polls as there is a general perception that Labour would increase the national debt significantly more than the Conservatives. 

[JGV]

The Baht does not reflect the market - it is manipulated by the government

[simoh1490]

Just now, JGV said:

The Baht does not reflect the market - it is manipulated by the government

Big sigh.....not again!

 

OK, tell us how they do it.

[George Feedback]

20 hours ago, simoh1490 said:

Wake up and get with the times!!!! Bloomberg is owned by Michael Bloomberg and is an American company, not that has anything whatsoever to do wit the point the article makes!

Okay, my mistake, DP-A is German, but I still don't believe any of the experts can predict what will happen.

The crash in 2007 is a prime example. Joe Soap could see there was trouble brewing in the US with the sub-prime mortgages and UK banks lending at 105%+ of property values. Banking was out of control, with all the other dodgy deals they dreamed up too.

The general election is just giving speculators a chance to back on the right horse as the odds change. Another significant drop in the pound is unlikely unless Labour are in power in alliance with the SNP. A week to wait and see.

Thai baht has been overvalued for years, any money market watcher will tell you that. Weak, corrupt, military and/or simply inept government is a cause, but tourism brings in so much foreign currency it is ignored.

Cheers, my pound coin is on May.

 

[simoh1490]

2 hours ago, George Feedback said:

Okay, my mistake, DP-A is German, but I still don't believe any of the experts can predict what will happen.

The crash in 2007 is a prime example. Joe Soap could see there was trouble brewing in the US with the sub-prime mortgages and UK banks lending at 105%+ of property values. Banking was out of control, with all the other dodgy deals they dreamed up too.

The general election is just giving speculators a chance to back on the right horse as the odds change. Another significant drop in the pound is unlikely unless Labour are in power in alliance with the SNP. A week to wait and see.

Thai baht has been overvalued for years, any money market watcher will tell you that. Weak, corrupt, military and/or simply inept government is a cause, but tourism brings in so much foreign currency it is ignored.

Cheers, my pound coin is on May.

 

You've got it all back to front again I'm afraid:

 

"Thai baht has been overvalued for years, any money market watcher will tell you that".

 

Please provide links to at least one reputable analyst who thinks THB is overvalued, it isn't, if anything it is undervalued given a five year horizon.

 

"Weak, corrupt, military and/or simply inept government is a cause".

 

THB doesn't care one iota which entity is in power, the governement of the day has nothing to do with its value.

 

"Thai baht has been overvalued for years.....but tourism brings in so much foreign currency it is ignored"

 

Foreign currency in Thailand is derived from a number of different sources, exports, overseas investments, hot money, black money and tourism, tourism accounts for less than 17%. Far from ignoring the problem of THB strength, the government, or rather BOT, is acting to try and weaken the currency but their choices are limited. The most likely one is some form of capital controls to prevent the exchange of hot currency from damaging the economy and increasing the strength of THB even further. Since a baht that is too strong damages exports, it's not in Thailand's best interests to ignore the problem, indeed I suspect they wish they didn't have so much foreign currency since their foreign currency reserves are extraordinarily high yet it's money they can't use to better the economy or balance budgets etc.

 

 

 

[George Feedback]

On 6/1/2017 at 3:32 AM, simoh1490 said:

Far from ignoring the problem of THB strength, the government, or rather BOT, is acting to try and weaken the currency but their choices are limited. The most likely one is some form of capital controls to prevent the exchange of hot currency from damaging the economy and increasing the strength of THB even further. Since a baht that is too strong damages exports, it's not in Thailand's best interests to ignore the problem, indeed I suspect they wish they didn't have so much foreign currency since their foreign currency reserves are extraordinarily high yet it's money they can't use to better the economy or balance budgets etc.

And you say you have it back to front? All the above does is support My argument...

[lungbing]

Perhaps they could use all that spare foreign currency to pay for the Chinese submarines.

[richy2201]

Just to re-ignite this thread again. Pound down to 43 baht today. To put it bluntly the U.K. Is a complete mess at the moment with a needless General Election leaving a population now more divided than ever. I can't see the pound hitting the "dizzy heights" of 50 (let alone the good old days of 60-70.) for quite a while. The short term outlook is bleak. Further than that is anyone's guess.