The Pounds Recovery?

Somebody believes in buying english pound whit thai bath at this moment........like an investment...

Today the Thai government has introduced 3 different methods of curbing the rising baht (They're explained in Bangkok Post). Good news I thought until I saw that the baht had strengthened against the GBP.
Jimbo your posts are excellent on this debate

kjellsnell wrote:Somebody believes in buying english pound whit thai bath at this moment........like an investment...

Now that's a thought, if every person in Thailand purchased the GBP ..... like an investment then surely the value of the pound would soar and the Thai baht would weaken.
At a later stage they could all buy back their Thai baht and make a hefty profit!!!!
Now I await to be shot down in flames for my silly post

lepidoptra wrote:

kjellsnell wrote:Somebody believes in buying english pound whit thai bath at this moment........like an investment...

Now that's a thought, if every person in Thailand purchased the GBP ..... like an investment then surely the value of the pound would soar and the Thai baht would weaken.
At a later stage they could all buy back their Thai baht and make a hefty profit!!!!
Now I await to be shot down in flames for my silly post

Great! At least one belive in this extremely god idea........Yea!

Some related perspectives on the pounds likley movement against the Euro and Dollar:

http://www.thisismoney.co.uk/news/artic ... _page_id=2

Interesting that the experts do not seem to agree on much more than a few months out. Surprising that so many think Quantitive Easing will restart in the UK - I would have thought with the change of government doing that would be an admission that labour got it right. It will be interesting to see what works next year - USA continuing QE, or UK and its slashing of expenditure. Will the USA start to properly recover and the UK's recovery die? Or the other way round? Could be the biggest economics experiment since WW2.

I must admit that I remain utterly baffled as to why the UK persists to follow the USA down the path to ruin. I mean, really! Your MPs are generally far, far more sensible, pragmatic, and intelligent than our Congress. Your voting population is much more in touch than ours - especially about international affairs and the global economies. From the wars to the economy - why oh why does the UK, our former ruler, seem to follow our lead (mis-lead) so much..?

I mean, really! Your MPs are generally far, far more sensible, pragmatic, and intelligent than our Congress. Your voting population is much more in touch than ours - especially about international affairs and the global economies.

is the above ,
a matter of opinion or a matter of fact .?
where do you get this biased imformation from ?.

the great has long gone from britain , never to return .
thailands income from exports , is on the up n up.
god bless ,, the poor farang third world counties .

For the last few days the GBP seems to be making ground against the Euro and US dollar. Having said that,once again, the
pound slides to below 48 to the Thai baht.
Explanations please or opinions from other members but no quotes from professional financial experts who are about as reliable as looking into a crystal ball.

lepidoptra wrote:For the last few days the GBP seems to be making ground against the Euro and US dollar. Having said that,once again, the
pound slides to below 48 to the Thai baht.
Explanations please or opinions from other members but no quotes from professional financial experts who are about as reliable as looking into a crystal ball.

Lepidoptra, the way I see it, or my ten penneth:

The US pumps money, - QE, and now QE2 - into the system, - which causes the value of the dollar to fall. Because of the falling value of the dollar money (and maybe lot of that QE money!) is directed to and invested in the countries/areas with strong currencies, i.e. those which haven't been as affected by the recession and where growth, currencies & interest rates are higher or expected to be higher - (i.e. Asia & SE Asia). All of which makes the currencies of those (Asian) countries even stronger. That's why the baht is continuing to go from strength to strength.

The UK did the right thing (earlier in the year and more recently through the spending review), by announcing & introducing "austerity measures", which gave sterling its upward boost at that time. When talk of more QE in the UK cropped up a few weeks back, that caused sterling to fall (because if further QE was injected it would cause sterling to fall). When better than expected Uk growth (GDP?) figures were released a week or so back which suggested that further QE was much less likely now, that again gave sterling a boost; .... as did the US's announcement of QE2 - as the dollar fell against sterling and the Euro. Since then the initial euphoria of the QE has started to wane and sterling has eased back again.

The Euro is currently waxing and waning as a result of worries about government debt (e.g. Greece, Ireland etc) and the risks of contagion within the EU, and thus its exchange rate against the pound and dollar move.

As a general point sterling is likely to remain relatively weak whilst there is little or no prospect of higher interest rates in the UK and/or whilst there is any prospect of any further QE in the UK (which could arise if the economic recovery falters). If inflation is thought to be becoming a problem and thus interest rates likely to increase (to stifle it), that's when sterling should rise. Also sentiment on sterling is affected by the releases of various relevant economic data.

Similarly higher interest rates in one country will tend to attract money from countries with lower interest rates, and Thailand and most SE Asian countries currently have higher interest rates than the UK, Europe or the US.

It's currently something of a dilemma, as historically if the Dollar had a problem or was weak, money would be directed to the Euro or Sterling. If the Euro had a problem money would be directed to the dollar or sterling, and so on. However currently no one currently wants to put their money in any of those three currencies, (they all have their downsides/low interest rates etc). So where can the money go? - Singapore, Hong Kong, Australian or Canadian dollars, Thailand baht or Gold.

dollar and pound will go 10-20% down next 2 year - both countries close to bankrupt

ICELAND ALREADY IS BANKRUPT

Clear and concise explanation, Arjay. Bravo!

What we are witnessing with money moving to Asia is the beginning manifestations of the outright rejection of the dollar. The clueless Fed and Treasury can't seem to sort out the fact that the banks are getting free QE money from them and using it to buy foreign currencies or sit in foreign banks/bonds. They profit from the interest AND the appreciation of the foreign currency. A bank having done that, say in January 2010, would now be sitting on a 11-15% or more gain.

Why oh why would that bank RISK loaning that money domestically for a paltry return of 5% or so? It boggles the mind how clueless we Americans are sometimes.