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All eyes on BOT data as baht hits highest level in six years


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All eyes on BOT data as baht hits highest level in six years

 

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Rising baht:   The baht rose to 30.15 per against the US dollar on Friday (December 27), up 8 per cent from last year’s closing price of Bt32.55/dollar. Source : Kasikornbank

 

The baht appreciated to Bt30.15 against the US dollar last week, its highest level in six years on Friday, Kasikornbank said.

 

Kasikornbank has forecast that the baht could move in a range of Bt30-30.30 to the dollar this week (December 30 to January 3). Investors sold dollars after US economic data showed signs of disappointments such as weaker-than-expected orders for durable goods and lower new-home sales.

 

The baht was up 8 per cent in 2019 from the 2018 closing price of Bt32.55, according to Kasikornbank.

 

The baht’s appreciation has been driven by the country’s current account surplus and investor perception of the baht being a safe-haven currency.

 

As of December 27, the baht moved in a range of Bt30.15 to Bt32.43 in 2019. Thai exporters have complained about the baht’s appreciation hurting exports and recently Japanese carmaker Mazda said it might move a part of its car manufacturing facility in Thailand back to Japan due to the impact of the strong baht.

 

The market will be closely watching the Bank of Thailand’s economic report for November, which is due to be released on Monday, as well as December’s inflation rate. Among key external events, investors are waiting for the signing of a trade deal between the United States and China and release of the Fed’s meeting minutes.

 

Key US economic data due this week include the United States purchasing managers index, consumer confidence index in December, number of home-purchase contracts, the home price index and jobless benefits claims.

 

Source: https://www.nationthailand.com/business/30379983

 

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-- © Copyright The Nation Thailand 2019-12-30
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42 minutes ago, webfact said:

The baht appreciated to Bt30.15 against the US dollar last week, its highest level in six years on Friday, Kasikornbank said.

"its highest level in six years"

I am prepared to accept full blame for this. Six years ago on December 29, 2014, I arrived in Thailand for the first time. And so began the rise of the baht.

It's quite similar to my real estate dealings over my life in Canada. Every time I dumped a big bunch of coin into real estate, the market would crash within a month.

Sorry guys !

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4 minutes ago, bristolgeoff said:

exchange rates on many  countries money has made it very hard for the expats and business in Thailand.when will they realise it affects everyone and something must be done to control the rise.

If only Thailand could persuade the US Dollar to not weaken further!

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1 hour ago, saengd said:

The problem on this occasion is not the Baht getting stronger it's USD that weakened, the Dollar Index fell by 0.5% on Friday, the date of the article. https://www.marketwatch.com/investing/index/dxy

This latest drop against the USD may well have been caused by US data, but it's just a continued trend all through 2019.

 

USD, AUD, EUR, CAD, even SGD have declined throughout the year. The only major one that seemed to buck the trend in recent months was GBP, but who knows how much of that was a Brexit thing

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The graphs are interesting, they seem to show that those currencies moved by either (about) 5% if they have a relationship to USD or (about) 10% if they float freely. That confirms that currencies that are tracking USD in some way, usually for trade purposes, have followed USD downwards whereas THB has not. If you look at the Dollar Index you'll see it was down to 90 in 2018!

 

So why did THB not track USD downwards and why did it retain so much of its value? The cynics will tell you it's because of manipulation by the elite.  In the real world however the trade surplus is a more probable reason, which is exactly the reason that the US has gone after China and created the trade war.

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2 hours ago, saengd said:

The problem on this occasion is not the Baht getting stronger it's USD that weakened, the Dollar Index fell by 0.5% on Friday, the date of the article. https://www.marketwatch.com/investing/index/dxy

Exactly... Here are few interesting graphs from X-Rates..  If you look at trading over Christmas $US $Au & UK pound all went south as traders left the market.. where did they park their money?.. Have a look at Thailand.. 

Top..Thailand Bt. next UK pound.. 3rd.. $Au  4th..$US

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1 hour ago, bristolgeoff said:

exchange rates on many  countries money has made it very hard for the expats and business in Thailand.when will they realise it affects everyone and something must be done to control the rise.

Anything to change this will be done too late. Cant have the HISO's losing money and face.

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1 hour ago, GinBoy2 said:

The only major one that seemed to buck the trend in recent months was GBP, but who knows how much of that was a Brexit thing

There was a flash in the pan when the Conservatives won the election but it has been downhill since.. tiny rise with weakening $US.. With a deadline for exit from EU by the end of 2020 and not a great deal of hope for a comprehensive trade deal it is looking like a 'no deal Brexit'.. the pound hasn't hit bottom yet..

 

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It’s not rocket science.  Just observe and memorize the chart pattern of daily exchange rates for USD vs Baht. Next, observe the chart pattern of daily exchange rates for Chinese Yuan vs either USD or Thai Baht.  You will see the EXACT SAME PATTERN in reverse.

This confirms someone (ChiComs) is dumping USD maturing Treasuries into Bank of Thailand—hot money.

As long as BoT allows this transfer—the Baht will keep rising.

This also begs the question about incentives on BoT’s side.  They must have some pretty persuasive offers in order to let this happen daily.

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26 minutes ago, Isaan sailor said:

It’s not rocket science.  Just observe and memorize the chart pattern of daily exchange rates for USD vs Baht. Next, observe the chart pattern of daily exchange rates for Chinese Yuan vs either USD or Thai Baht.  You will see the EXACT SAME PATTERN in reverse.

This confirms someone (ChiComs) is dumping USD maturing Treasuries into Bank of Thailand—hot money.

As long as BoT allows this transfer—the Baht will keep rising.

This also begs the question about incentives on BoT’s side.  They must have some pretty persuasive offers in order to let this happen daily.

You will agree I'm sure that if your theory was correct we would see a significant increase in the Foreign Currency Reserves (FCR) at some point and we don't. See below the FCR's by week for 2019, on average they have increased at a rate of about USD 1 bill per month during 2019 whilst the trade surplus for the last four months of 2019 has equalled USD 4.39 bill ging a total surplus for the year of USD 17 bill......, presumably the difference was spent on trying to weaken THB.

 

EDIT: sorry I mis-read that, the trade surplus was USD 4.39 bill for the last four months giving USD 13 bill. for the year, that's almost exactly the same amount the FCR's have risen by.

 

 https://www.bot.or.th/App/BTWS_STAT/statistics/ReportPage.aspx?reportID=94&language=eng

 

https://tradingeconomics.com/thailand/balance-of-trade

 

With regard to RMB: China is committed to keeping the Yuan within a specific range in relationship to the Dollar, when you see the Yuan fall and THB rise it's because China is trying to maintain that monetary relationship whereas Thailand is thus far unable to do so.

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35 minutes ago, saengd said:

You will agree I'm sure that if your theory was correct we would see a significant increase in the Foreign Currency Reserves (FCR) at some point and we don't. See below the FCR's by week for 2019, on average they have increased at a rate of about USD 1 bill per month during 2019 whilst the trade surplus for the last four months of 2019 has equalled USD 4.39 bill ging a total surplus for the year of USD 17 bill......, presumably the difference was spent on trying to weaken THB.

 

EDIT: sorry I mis-read that, the trade surplus was USD 4.39 bill for the last four months giving USD 13 bill. for the year, that's almost exactly the same amount the FCR's have risen by.

 

 https://www.bot.or.th/App/BTWS_STAT/statistics/ReportPage.aspx?reportID=94&language=eng

 

https://tradingeconomics.com/thailand/balance-of-trade

 

With regard to RMB: China is committed to keeping the Yuan within a specific range in relationship to the Dollar, when you see the Yuan fall and THB rise it's because China is trying to maintain that monetary relationship whereas Thailand is thus far unable to do so.

While I see the data points to some USD weakness—it doesn’t account for 2+ years of relentless Baht appreciation vs USD.  I have no idea what Thailand spends their USD reserves on.  Nor does it explain why other SE Asian currencies have nowhere near the same level of appreciation.

At least we can both agree that Thailand has failed miserably in keeping their currency stable.

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When I retired in Thailand in late 2017, my Euro was worth 45 Bahts, now it is down to 33 Bahts. In fact the 30 thousand or so euros I transfered to my Thai bank account months ago is proving to be one of my best investments ever. Who would have guessed.

 

It is wishful thinking to believe this is bad for Thailand though. Having a strong currency means the labour of your own people is highly valued. It is the best indicator of a country's prosperity and development. The Baht is behaving like the German Mark was in the 60s and the 70s, and for much the same reasons. Winners have become losers.

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6 hours ago, neeray said:

"its highest level in six years"

I am prepared to accept full blame for this. Six years ago on December 29, 2014, I arrived in Thailand for the first time. And so began the rise of the baht.

It's quite similar to my real estate dealings over my life in Canada. Every time I dumped a big bunch of coin into real estate, the market would crash within a month.

Sorry guys !

Buy high, sell low ... yes, been there. Retired to Thailand 8 years ago as a lower cost country with a sabai, sabai culture ... and now? Not so much ...

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8 hours ago, webfact said:

recently Japanese carmaker Mazda said it might move a part of its car manufacturing facility in Thailand back to Japan due to the impact of the strong baht.

When the big boys start to move you know Thailands going to go down the pan!

Many SME's are going to hit the wall next year!

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8 hours ago, neeray said:

"its highest level in six years"

I am prepared to accept full blame for this. Six years ago on December 29, 2014, I arrived in Thailand for the first time. And so began the rise of the baht.

It's quite similar to my real estate dealings over my life in Canada. Every time I dumped a big bunch of coin into real estate, the market would crash within a month.

Sorry guys !

I can't let you take all of the blame, I must shoulder my own responsibility here as I bought my house 6 years ago and made the final move to LOS after that. I also voted leave in the UK Bexit vote, which doomed the Pound, so I am doubly to blame

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Either the Thai Baht was weaker last week or the Norwegian Kroner was stronger as the NOK rose in value from 3.30 or so to 3.42 Baht per 1 Kroner. That's the biggest increase I've seen in a week since I first arrived in 2010.

 

Lets hope it continues.

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39 minutes ago, Pilotman said:

I can't let you take all of the blame, I must shoulder my own responsibility here as I bought my house 6 years ago and made the final move to LOS after that. I also voted leave in the UK Bexit vote, which doomed the Pound, so I am doubly to blame

 

No mate, not entirely. I bought our house 2005/6 time. Averaged 71/72 ThB for 1 GBP in the payment transfers to the builders over the build period!

 

Everything here was so cheap then. Now prices have risen and the e/r plummeted!

 

Although I voted remain in the referendum so not doubly to blame. Even without Brexit the GBP was on a down ward trend, which would probably have continued but not so steeply.

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7 hours ago, saengd said:

If only Thailand could persuade the US Dollar to not weaken further!

if they do that the US exports will fall and Trump will look bad.... can't do, he needs a weak USD to keep the economy looking good

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