How low, can pound go?

[Watson.]

With new £75 billion in QE, pound continues to drop against other currencies. Today 47.7 baht for your pound, how far can it still drop! Does it get to a point where Brit expats give up and return to UK? I remember 67 baht to pound, how things have changed over the years, for the worse.

[izzix]

i remember when it was in the 70s 80s and even 90s so thats how bad things have become now

[lepidoptra]

Post by Watson. » October 8, 2011, 12:33 am
With new £75 billion in QE, pound continues to drop against other currencies. Today 47.7 baht for your pound, how far can it still drop! Does it get to a point where Brit expats give up and return to UK? I remember 67 baht to pound, how things have changed over the years, for the worse.

Dr Watson, I wish I had a crystal ball? It was 75baht to the pound when I first lived in LOS. IMO until the Bank of England raise the basic interest rate the pound will continue to fall and inflation will spiral out of control. It just seems mad to print more money I have relied on my UK pension and although I havn't reached the poverty level things are extremely tight.
As far as the Thai baht is concerned it still remains strong despite the turmoils that Thailand has suffered. Previous posts by certain members (no names mentioned) have shown that their optimism has not been realized.

[JimboPSM]

The lowest average annual buy/sell rate since 1981 (the start of my records) was 31.5.

While I believe that it is most unlikely that it would go that low it should be noted that the average during the last period of relative stability was 40.1 for the 16 years from 1981 to 1996.

Please note that I am defining the “relative stability” period as pre Asian crash, dotcom bubble and the “all inclusive” 2008 financial meltdown and its continuing fallout, however I am ignoring the occasional coup as they are a fairly normal part of life in Thailand.

My chart of the average annual buy/sell rate:

While history doesn’t tell you what the rate should be in the future, it does tell you what it has been and as “we” don’t have a stunningly good record of learning the lessons of history, there is always a possibility that it will be repeated

[trubrit]

Jimbo. Can't remember the low of31.5 in 84 but the period of four years 93-6 below 40 were , if my memory is correct, at a time when the pound value was tied to the dollar as 25bht, so if we lost out to the dollar we also suffered in baht .

[JimboPSM]

Jimbo. Can't remember the low of31.5 in 84 but the period of four years 93-6 below 40 were , if my memory is correct, at a time when the pound value was tied to the dollar as 25bht, so if we lost out to the dollar we also suffered in baht .

Yes, essentially you are correct, though I think you meant that the THB not the pound was tied (with some minor variations) at a rate of 25 to the USD.

You are also correct about what happened if the pound fell against the USD, conversely in the far better scenario (for Brits) of the pound gaining against the USD there was also a matching gain against the THB

To confirm, here is my chart of the USD/THB:

These are the equivalent numbers for the USD to the ones I gave above:

• • The lowest average annual buy/sell rate since 1981 was 21.8 in 1981.
  
  • The average during the last period of relative stability was 24.9 for the 16 years from 1981 to 1996.

[pompui]

Does it get to a point where Brit expats give up and return to UK?

For me personally 35 or lower

[trubrit]

Does it get to a point where Brit expats give up and return to UK?

For me personally 35 or lower

I can't envisage a scenario where , no matter how low, I would be better off back in the UK, unless of course you are taking the availability of extra social security into account .If there is any left for us fully paid up citizens . :-" The only problem might be , qualifying for the visa .

[pompui]

Does it get to a point where Brit expats give up and return to UK?

For me personally 35 or lower

I can't envisage a scenario where , no matter how low, I would be better off back in the UK, unless of course you are taking the availability of extra social security into account .If there is any left for us fully paid up citizens . :-" The only problem might be , qualifying for the visa .

Still under 50 yrs old so the worst case scenario would be bact to the UK rolling over the multi O visa,marriage to Thai, exiting every 90 days and renewing it after 15 months thus not having to show min 400k cash here and being on noodle soup daily.
Live in hope that maybe in a few years time with a retirement visa that Thai immigration will accept just any figure for pension income, without having to prove it in anyway, just as a couple of countries have enjoyed this for many a year.

[old-timer]

This subject has been canned time and time again. At 47 to the pound it's still cheap to live in Udon. The average house in the UK costs just over GBP 160K (7.5 million baht). The average falang house price in Udon I would guess at half of that. Schooling and medical costs are provided free in the UK, other than that everything is more expensive than in Udon. Imported falang products can be slightly more expensive in Udon, as is a Durian in London where it'll cost you a tenner for one.
Hunker down and go broke in Udon, It'll be cheaper.

OT...........

[lepidoptra]

I can't envisage a scenario where , no matter how low, I would be better off back in the UK, unless of course you are taking the availability of extra social security into account .If there is any left for us fully paid up citizens . :-" The only problem might be , qualifying for the visa .

Earlier this year I returned to the UK for 4 months.
I must admit that my monthly outgoings from my pension were less than in Thailand. I refer mainly to the cost of food. Unfortunately I am one of these strange people that have not taken to eating Thai food. Most products at my local Tesco's in the UK are very much cheaper than Tesco's in Udon. Yes I hear members saying "' that's because Tesco's in Thailand have to import". Well most items in the UK are imported. What about the strong baht? that should makes Thai imports cheaper.
I purchased a TV and laptop in the UK. No more expensive than in Thailand.
My use of electric in the UK was about the same as I use in Thailand. Gas of course is a different matter very expensive, as is diesel for the car, although my free bus pass takes the strain.
As a non drinker my expense is zero. Other downsides of course is the weather and where would I find a young attractive lady to care for me in the UK. Most of them were grossly overweight, hence the need for them to wear Jogging suits. I do still own my house in the UK
I have considered returning to the UK with my wife. I just wish the Thai food in England wouldn't cost me an arm and a leg.
I suppose for now we'll all live in hope that the GP pound recovers or the thai baht collapses =D>

[chigger]

A year ago I was sure the Dollar would be close to 25 baht by now. Guess the euro crisis has done the Dollar some good. Now it`s the Pound, and where it`s going to halt one can only speculate. I´m leaning more and more toward putting my cash in Aussie Dollars and Thai Baht.

[JimboPSM]

As the AUD got a mention above, I’ll add the equivalent chart for the AUD/THB to give another comparison:

These are the equivalent numbers for the AUD to the ones I gave for the GBP & USD above:

• • The lowest average annual buy/sell rate since 1981 was 17.2 in 1993.
  
  • The average during the last period of relative stability was 19.8 for the 16 years from 1981 to 1996.

Compared to the GBP & the USD, the AUD has had a pretty good performance, particularly since 1993 =D>

[KHONDAHM]

I'm reading a lot of "hope the pound gets stronger" here. What could possibly be the catalyst for that happening? When Greece finally goes, it'll take quite a few European banks with it, and those will take a fair number of UK banks with them. The only catalyst I can think of would be if the USD collapsed first, but that won't happen. USD will collapse, but not before GBP.

[rick]

UK's exposure to Greek Debt is low, just a few billion. But could be a knock on effect if other European banks go under. This is why France and Germany really want to bailout Greece, because they hold most of the debt!

I can see the Euro going lower, but the pound is pretty stable so far. But 45 baht to the pound likely if the economy really sucks. Lower than this unlikely i think because then the world economy is going the same way - so everybody down.

[JimboPSM]

A small milestone was reached when the banks opened in Thailand today with the GBP/THB TT Buy Rate opening being 50.14 (Kasikorn Bank) – the first time it has been over 50.0 since 11th August 2010.

GBP/THB TT Buy Rate since 1st January 2011

[stattointhailand]

with a bit (ok a lot) of luck, having finally broken back through the fify barrier, it will strengthen further

[JimboPSM]

While I don’t normally show charts with only a few days gap between them, I think what has happened over the last few days can serve as a useful demonstration (and a warning) as to how dramatically things can change in only a few days.

The GBP/THB rate only managed to stay over 50 for a matter of hours on the 15th May before, rather ignominiously, stumbling over the cliff edge and losing nearly 2% over the following three days.

GBP/THB TT Buy Rate since 1st January 2011

While part of the fall is due to the BoE reducing its growth forecast and the downgrade of some Spanish banks this week, some degree of the fall is due to collateral damage from the geopolitical fears in the market regarding Euro land (along with a whole host of other political and economic factors).

The degree to which each of these factors influenced the fall, how rational those fears may be and how much they may be being driven by speculation is open to question