Baht What up with Dat?????

Post by **Bump** » May 10, 2006, 5:02 pm

Lost me on that one but thats really nothing new

Post by **Bump** » July 1, 2006, 9:34 am

Well from what I see the dollar is not doing that well this year, last year on this date we were at 41, today 38. Still not enough to really effect me but certainly not as good either

Post by **Bump** » July 5, 2006, 10:07 am

May not be a good year to save for a new motorcycle:

Conversion Table: USD to THB (Interbank rate)

Time period: 06/29/06 to 07/05/06.
Daily averages: 06/29/2006 38.46550
06/30/2006 38.46690
07/01/2006 38.24580
07/02/2006 38.270
07/03/2006 38.270
07/04/2006 38.11880
07/05/2006 37.94750

Post by **JimboPSM** » July 5, 2006, 9:21 pm

Ray, it won't help you feel any better, but this is one of my USD/THB charts which I've modified to try and make it more readable, sorry for the quality but I

Post by **Bump** » July 6, 2006, 10:14 am

You know fortunately the only apect of my lifestyle that this effects, is the amount of new toys and savings are a little less. So I'm still very lucky.

I'm begining to feel like I actually have a gun on my back when I purchase fuel. Even the Thai small buinees are ahving to raise prices transportation costs are simply sky high. The part I'm having a hard time graping is, the oil companies are declaring huge profits, so is the increased costs real or a manipulation wiht the world paying for it.

It would seem to me that large portion of money should go to further exploration and altenative fuel research. I'm a usual probably missing something but I don't see it.

Iraq is obvioulsy hurting the dollar, there are huge sums spent in the region, to a select few companies. Hope a solution is found soon.

The dollar was strong when the defisate was attacked, days gone now.

Post by **Paul** » July 13, 2006, 11:28 pm

To bring the topic into real time - I have some people coming here to visit Thailand soon and they have asked what currency travellers cheques to bring - I suggested UK sterling - did I do the right thing ? The US$ seems to be a bad choice of late - despite it being the favourite in recent past trips.

Post by **JimboPSM** » July 14, 2006, 1:00 am

Assuming they are coming to Thailand from the UK, Sterling TC

Post by **Paul** » July 14, 2006, 8:24 am

Thanks for confirming that Jim
The email has been sent with the said advice

Post by **Bump** » July 14, 2006, 1:38 pm

I thought this really brought up a good point, my retirement is in dollars and I can't change that. I have seen numerous POSts saying to get out of dollars. Well, that may be sage advice but by the time I convert the dollars into another currency, it would seem to me that I have already lost. As long as it is paid indollars I see no advantage to conversion am I missing something?

Post by **BKKSTAN** » August 1, 2006, 10:07 am

Some Thai banks raised their interest rates today!Guess what,the baht strengthened again.More loss of income to me.I have been hoping that we might see 40 again,as I was going to transfer money in to Thailand.Now it is 37.8,loss of aprox.10% since the first of the year.Of course ,I was waiting to transfer when it got back to 42,when it was at 40.lol

Post by **JimboPSM** » August 1, 2006, 7:38 pm

BKKSTAN wrote:Some Thai banks raised their interest rates today!Guess what,the baht strengthened again.More loss of income to me.I have been hoping that we might see 40 again,as I was going to transfer money in to Thailand.Now it is 37.8,loss of aprox.10% since the first of the year.Of course ,I was waiting to transfer when it got back to 42,when it was at 40.lol

Interest rate increase was not due to any action by BoT, but by SCB acting unilaterally, unfortunately it appears from reports in Bangkok Post & Nation that this was closely followed by Kasikorn and the rest will probably follow suit - hmm... whatever happened to competition, guess they are all learning from the oil and pharmaceutical companies

Compared to yesterday, closing value of THB actually weakened by 0.05% (almost unnoticeable), although there was a blip which showed a strengthening which I guess coincided with the SCB announcement and some trader jumpimg to the (incorrect) conclusion that it was related to BoT not the commercial banks.

USD/THB has traded more or less within a one baht range since its low this year on 28th April.

To get the USD/THB rate back into the 40's I would suggest to our US friends that you need to really kick seriously hard the butts of your senators and representatives to really eliminate the Budget Deficit instead of continually window dressing the numbers.

Post by **JimboPSM** » August 5, 2006, 6:55 am

For those of you trying to understand changes in foreign exchange rates, Friday produced another little gem to give you food for thought.

It was announced in the USA that unemployment in the USA had increased from 4.6% to 4.8%.

A direct result of this statement was the weakening of THB against GBP by almost 1%.

The rationale behind this is that the increased unemployment numbers indicate a slow down in the US Economy, if the economy is slowing down then the Fed will not need to increase interest rates when they meet next week which, in theory, would have raised the value of the dollar BUT the market had jumped the gun and had already priced in an increase in interest rates in the Forex markets which it now had to rapidly undo.

This in itself affects USD / THB insignificantly as THB is generally seen to track USD, but it impacted heavily against other currencies such as GBP / USD.

The end result was a 1% weakening of THB against GBP (which is a big change) even though neither Thailand or England had any economic news which would in itself produce any movement.

Hopefully this will act as a warning to anyone who thinks that they can make easy money on the forex markets - if you want to make a small fortune in forex make sure you start with a large fortune

Post by **BKKSTAN** » August 5, 2006, 7:06 am

JimboPSM wrote:
Hopefully this will act as a warning to anyone who thinks that they can make easy money on the forex markets - if you want to make a small fortune in forex make sure you start with a large fortune

Point taken and accepted

Played around with a practice Forex account for 2 weeks.$2000 to $3600 first week,3 days later $0

Post by **Bump** » August 5, 2006, 9:26 am

Very rationale explanation, but I think this kind of thing is really for the boys, not sand lot players.

I had never really watched the rates of exchange until I moved herre four years ago, having done that now for four years, the one thing I learned is I don't have a clue as to what is going on at the moment much less in the future.

Post by **arjay** » August 5, 2006, 9:44 am

Jimbo, what about the Bank of England unexpectedly raising Uk Interest rates by 0.25%, surely that had a part to play in the appreciation of the pound?? No one seems to have mentioned that!!

The Bank of England has increased interest rates by a quarter of a percentage point to 4.75% in an effort to keep inflation in check.

The surprise move marks the first change in borrowing costs in 11 months and the first increase in two years.

Experts were divided over whether the Bank's Monetary Policy Committee would move sooner or later to raise rates.

Inflation rose to 2.5% in June - above the government's 2% target - amid fears energy costs may force prices up more.

Interest rates also rose in the eurozone on Thursday. The European Central Bank announced a quarter-point increase - the fourth such hike in eight months - taking rates to 3%.

Post by **arjay** » August 5, 2006, 10:06 am

As an aside, here is some comment about, why many countries are raising interest rates and the affects of that (from the BBC):

Q&A: Why are interest rates rising?

Spending plans may have to be cut
The Bank of England has raised interest rates by a quarter of a percentage point to 4.75%.

It's just the latest in a series of worldwide rate rises, but why are central banks hiking them now?

Who else is raising interest rates?

It's not just the Bank of England that is raising interest rates.

The European Central Bank also raised rates on Thursday to 3%, and earlier in the week Australia raised its rates to 6%.

In the United States, the Federal Reserve has raised rates on 17 consecutive occasions to 5.25%, and it may do so again next week.

And even Japan, which has had near-zero interest rates, saw its central bank make its first increase in rates in six years last month.

Monetary policy makers are worried that renewed economic growth, combined with high oil prices, could bring back inflation.

What is worrying central banks?

A common factor is the effect of high energy prices, which is feeding through the economy to affect everything from transport costs to the price of utility bills.

With trouble in the Middle East pushing oil to over $70 per barrel, expectations that the oil price rise would only be temporary are now being revised.

Inflation in the UK rose to 2.5% last month, 0.5% above the economic target set by the Treasury.

Central bankers are also worried about asset prices, especially the cost of housing in the US and the UK.

The concern is that low interest rates has encouraged people to purchase more property, both to buy and let, and pushed up prices.

The ratio of house prices to average earnings has reached record highs in these countries.

And there is a concern that people have borrowed too much money, partly against the increased value of their property.

Will interest rates continue to rise?

Central banks want to move cautiously for two reasons.

There are concerns that higher interest rates could choke off economic growth, especially in areas like the eurozone where recovery is just beginning.

And there are concerns that a rapid rise in rates could lead to a big increase in the cost of debt, causing widespread difficulties for individuals who are over-stretched.

But most central banks these days believe that the only way to beat inflation is to tackle inflationary expectations before they get started.

So they want to send a clear signal to individuals and companies that they will act firmly.

And this means that - if inflation continues to rise - they are likely to take action again if they are to maintain their credibility.

Who will be affected most by the rate rise?

Many central bankers have argued that the recent bout of very low interest rates around the world have led people to underestimate risky investments.

The cost of borrowing for weak companies was not much different from the interest rates charged to stronger companies, for example.

They hope that the rise in interest rates will encourage people to re-evaluate such risks, and expect that the cost of borrowing will rise faster for riskier types of investments, whether in companies or countries.

This could hit individuals, companies and countries who have over-borrowed.

UK banks have already made big increases in their provisions for bad debts.

Who will benefit from the rate rises?

The biggest gainers from the rate increase will be savers.

Central banks hope that consumers will be encouraged to save more and spend less, thus helping to rebalance the economy.

This is especially true in the US, where a consumer boom has sucked in imports from around the world and led to a huge balance-of-payments problem.

The rate rises could also help pension funds who depend on bonds rather than stocks for their income - they will be more able to fund future pensions.

Post by **Freedom Fried** » August 5, 2006, 5:35 pm

Interest rates are on an upward trend as central banks globally -- under

the auspices of the Bank for International Settlements

( http://en.wikipedia.org/wiki/Bank_for_I ... ettlements )

-- factor in oil price volatility, US/UK/Australian housing bubbles (pop,

pop, pop) and massive unsustainable consumer debt. Add a Mid-East

crisis or two and what do you have? You have this:

Daily Telegraph: Britons go bust at the rate of one per minute
Figures biggest since 90s crash

One person is falling victim to insolvency every minute of the working day

and home repossession applications show the biggest rise since the early

1990s housing crash

Click Here

It is just as bad in Thailand. Remember 1997 anyone? Tipping Point #2

is very, very close: the baht is not immune.

Average Thai holds six 'credit' cards -- all in the red. Peter-Paul

economics. To keep an eye on all this try here:

http://www.housepricecrash.co.uk/index.php

Now is the time to consolidate. I pity anyone who's investing right now.

Post by **JimboPSM** » August 5, 2006, 7:37 pm

arjay wrote:Jimbo, what about the Bank of England unexpectedly raising Uk Interest rates by 0.25%, surely that had a part to play in the appreciation of the pound?? No one seems to have mentioned that!!

The Bank of England has increased interest rates by a quarter of a percentage point to 4.75% in an effort to keep inflation in check.

The surprise move marks the first change in borrowing costs in 11 months and the first increase in two years.

Experts were divided over whether the Bank's Monetary Policy Committee would move sooner or later to raise rates.

Inflation rose to 2.5% in June - above the government's 2% target - amid fears energy costs may force prices up more.

Interest rates also rose in the eurozone on Thursday. The European Central Bank announced a quarter-point increase - the fourth such hike in eight months - taking rates to 3%.

arjay, I did not mention the BoE interest rate movement as the appreciation from that was already fully factored into European and American rates during Thursdays European and American trading; the Asian markets were already closed but when they opened Friday morning it was with fully adjusted rates.

The unemployment numbers were announced in the USA on Friday after all Asian markets were closed for the weekend, however remember that Asian currencies continue to be traded in the European and American markets after Asian markets have closed.

You will see the movement I have described in Thailand in the rate that currencies open Monday.

I was trying to simply demonstrate how a seemingly innocuous announcement in one country can make the exchange rate move significantly between two others.

It also shows just how complex and interrelated everything is as we all now live in a global market place.

Post by **JimboPSM** » August 6, 2006, 10:11 pm

Now that the surprise (to almost every one else but me) BoE interest rate rise and other data from the US is finally starting to sink in, analysts are beginning to recognise that GBP may be heading towards the two dollar level.

BBC Business News article today: [url=http://news.bbc.co.uk/1/hi/business/5250250.stm]

Post by **Freedom Fried** » August 7, 2006, 6:34 pm

Factor in the upward trend in Thai oil import prices with no slowing in industrial/consumer demand and hey presto, downward pressure on the Thai baht.

Combine this with a depreciating dollar (engineered by the Fed to mask the oil shock in the US wallet) and a concomitant up-trend in the relative value of the GBP is inevitable.

In plain English sterling will breach the $2.00 ceiling sooner rather than later. Wait before converting GBP to baht: wait for that psychological $2.00 then watch sterling soar past 75.

http://etna.mcot.net/query.php?nid=23752