Baht What up with Dat?????

by **parrot** » January 12, 2012, 8:10 pm

Nice bump up in the exchange rate recently.....today $/30.8. The last time the dollar saw 32 was in Aug 2010. Now who was saying $/25 was just around the bend?

by **semperfiguy** » January 12, 2012, 8:17 pm

parrot wrote:Nice bump up in the exchange rate recently.....today $/30.8. The last time the dollar saw 32 was in Aug 2010. Now who was saying $/25 was just around the bend?

That's 31.8 parrot. Don't short yourself 1 baht...we need all the help we can get!

by **parrot** » January 12, 2012, 8:35 pm

Thanks!

by **JimboPSM** » January 12, 2012, 10:30 pm

Since the THB started its fall against the USD from its 2011 high point of 29.665 on 27th July, it has now fallen by 2.180 (7.3%) to 31.845.

The USD/THB rate is now at its highest point (from a US perspective) since 16th August 2010.

by **KHONDAHM** » January 14, 2012, 12:48 pm

Blah, blah, blah we are going to print a sload of money:

http://www.nationmultimedia.com/busines ... 73725.html

Ergo, baht falls.

by **bumper** » January 15, 2012, 6:28 pm

Boy this thing sure has been going a long time hasn't it?

So far for me the movement has been very good for a change

Nice to see your information again Jimbo

by **KHONDAHM** » January 16, 2012, 2:12 am

The primary reason for the weaker THB is a stronger USD. The problems in Europe (underscored by S&P's downgrades this past Friday) has investors charging into the USD as a safe haven. Refraining from a tangential discussion of the USD on this thread (a no-no), it's not much more complex than that as far as the THB is concerned...

by **bumper** » January 16, 2012, 3:52 pm

An aside my dollar is worth more and fuel costs are going higher, with what seems like a weekly event. So where you can gain is fixed Costs. I.E. loans at fixed interest rates.

This keep going for a few years then I will be looking at gold for a decade in the future.

Haven't been down the road myself, I feel for the guys on the Euro.

One other aspect effecting the Baht is the move to more indebtness by Thailand. which I believe to be a future event and not a part of the mix at the moment.

by **Aardvark** » January 16, 2012, 4:01 pm

Invest in Oz, we're not finished yet :pirate:

by **bumper** » January 16, 2012, 6:32 pm

I will be waiting for the Set to hit the 800's again before I go back in. Things are still to high for an entry point. Currency I would agree as to OZ>

by **JimboPSM** » January 16, 2012, 9:13 pm

KHONDAHM wrote:The primary reason for the weaker THB is a stronger USD....

I don’t normally pay a great deal of attention to the Dollar Index as, over the years, it has not shown much correlation with the currency pairings I look at; however on looking at it today I found that the USD/THB rate has actually had an unusually strong correlation with the Dollar Index over the last 6 months.

The correlation is close enough to make me wonder whether this could be a result of a policy shift by the BoT?

These charts show how close the correlation has been, the first of the Dollar Index (DXY:IND) is courtesy of Bloomberg and the second is one of mine of the USD/THB over exactly the same period.

As I don’t keep Dollar Index data and I couldn’t find a site where I could do a direct comparison this is the best I could do (does anyone know of a site where the Dollar Index can be compared and charted with exchange rates?).

NB: The Bloomberg chart in interactive format can be found here:

http://www.bloomberg.com/quote/DXY:IND/chart

by **bumper** » January 19, 2012, 4:37 pm

Thanks Jimbo

by **JimboPSM** » January 26, 2012, 12:36 am

It should have come as no real surprise to anyone that the BoT reduced the interest rate today by 0.25% from 3.25% to 3.0% - although having said that, in percentage terms the THB had its worst day against the USD so far this year.

From the Press Release:

.... The MPC assessed that the global economic outlook had weakened further. The euro zone is likely to enter a recession, undermining the authorities’ ability to solve the sovereign debt problem in the region. On the other hand, economic conditions in the US improved, but limited fiscal policy space and continued weakness in the housing market would constrain economic growth in the periods ahead to remain below potential. Economic growth in Asia moderated slightly, as softer global demand tempered export growth in the region.

The impact of the floods on the Thai economy was greater than previously assessed and the restoration process is likely to be more drawn out. The MPC projected that manufacturing production would return to normal by the third quarter of this year, supported by government measures, improving confidence, and accommodative monetary conditions. The positive momentum generated by these factors would help to limit downside risks to growth, especially the drag on exports from a slowdown in global demand.

Inflationary pressure declined, reflecting a more prolonged recovery in domestic demand and a slowdown in commodity prices in line with weakening global demand. Nonetheless, the boost to economic activity from reconstruction spending and various government stimulus measures could exert some upward pressure on inflation going forward.

The MPC assessed that inflationary pressure remains contained, while headwinds from the global economy continue to pose risks to Thailand’s economic growth. The MPC therefore voted unanimously to reduce the policy rate by 0.25 percent, from 3.25 percent to 3.00 percent per annum, effective immediately. With private sector confidence improving but still fragile, this policy accommodation should help accelerate the return of economic activity to normal levels.

Press release: http://www.bot.or.th/Thai/MonetaryPolic ... _12012.pdf

Going forwards, it will be interesting to see how the battle between the Finance Ministry (Government) and the BoT over FIDF plays out; this will determine whether the markets look on the BoT as effectively being nothing more than a puppet of the Government rather than the independent central bank that it is claimed to be :-k

by **lepidoptra** » January 27, 2012, 1:52 pm

And still the Baht remains strong?. :-s

by **JimboPSM** » January 28, 2012, 12:01 am

The last ten days has seen a strengthening of the THB against the USD - IMHO more probably a relative weakening of the USD as shown by the movement of the dollar index.

http://www.bloomberg.com/quote/DXY:IND/chart/

On some of my charts the recent movement certainly looks like it could be the start of a new trend, however the movement of just ten days in the currency markets is often far too short to show whether the movement is actually the start of a new longer term trend or just a market correction.

While the THB has “strengthened” against the USD since its recent low on the 16th January it is still 5% weaker against the USD than it was only six months ago.

While I have not come across any recent positive economic data about Thailand, there have been a number of disappointing news releases about the US economy in recent days that suggest to me that the “strengthening” of the THB is no more or less (as I said above) than a reflection of the dollar index.

However, as I have said before, these are simply my observations and there is always information out there that I have missed or may have misinterpreted #-o

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