Thread: Baht to Dollar: The Dollar index

Some banks are offering 33.95 Baht to the Dollar today

SCB

BOT

BBL

1 year dollar index chart here

34.05 today at SCB

If this carries on I'll be rich beyond my wildest dreams and start name dropping german car marques like Chintee soon

Originally Posted by Spin

If this carries on I'll be rich beyond my wildest dreams and start name dropping german car marques like Chintee soon

Me too. I'm planning on movin on up myself. Been checking out that new Tata car.

The whole forex thing is a mystery to me. The US economy is in the tank, stock market takes a major hit and yet the USD strengthens against the baht.

Yank economy is resilient and smth to think about when economy is shite worldwide people buy $. (safe/comforting/stable)

^^ Its not easily understood thats for sure. But from the little I observe each day tells me that when oil price rises the dollar weakens. The recent fall in oil price, coupled with recession chatter in yurp has lowered the euro and the Dollar has risen. If oil goes back up towards 130 the rate will go back to 32ish me thinks.

Originally Posted by Norton

The whole forex thing is a mystery to me. The US economy is in the tank, stock market takes a major hit and yet the USD strengthens against the baht

The US is facing a financial crisis and a cost push inflation,

However, their brutal economic system is better prepared and more flexible than the rest of the world,

they will probably be the first to recover when the storm hits the rest of the world, speculators are betting on the recovery and buying USD against other currencies which have been under heavy speculations for many years before, hence taking their profit and going back to safety with the USD

Originally Posted by Spin

But from the little I observe each day tells me that when oil price rises the dollar weakens.

The Hotelling principle is very marginal, hence the increase and decrease of the USD fluctuates with the interests earned on the Petro USD,

I think speculators looking for safety are the reason behind the recent surge of the USD, not the oil going down per se

There are cracks everywhere, gold is too expensive, oil is down, the next logical move for speculators is to look for undervalued assets, and the USD is right there, beaten down and ready to go up

Think oil is heading to $50-$75 range - bubble has been burst. Commodities are taking a long huge dump.

might take a few months, maybe even a year for the bubble to burst entirely

Originally Posted by britmaveric

Think oil is heading to $50-$75 range

I think industry costs have risen to the point where 50$ is impossible.
The producer countries would reduce output to protect the price and they are already talking about it yesterday

Originally Posted by Butterfly

hence taking their profit and going back to safety with the USD

That makes sense, the ozzie and nz dollar seem to be out of fashion all of a sudden, where better to go next that the U$D which was very cheap a week or so back.

I've got around 500,000 baht that I was going to change to dollars in anticipation of moving back to U.S. in October. I wish that I had been watching the indexes after the dollar hit 30.5 and didn't notice it until it hit around 33. I would prefer to wait until I leave to do the exchange but if it dips a little bit now (to 33.5), I might go ahead and cash out. In any event, unless it hits 36 or higher before October, I'm only talking about a couple of hundred dollars.

There are rumours that a major (major!) US bank is about to declare bancruptcy

maybe file under ch11, but no further info yet

^ is it Chase bank?

^More likely City, by my tip is Wachovia. Lehman is a given, but wouldn't be considered 'major' in these troubled times.

Rumors is that it will be Fanny Mae being bailed out,

story all over the WSJ,

WSJ: Freddie Mac was forced to offer unusually rich terms in a $3 billion auction of its debt, fueling concerns about a possible bailout for the mortgage giant and its sibling, Fannie Mae.

^and^^Old news, they were a given since the Congressman's speech a couple of weeks ago.

^ what are you talking about ? fresh from this morning, and nothing is a given in the financial world, you should know that by now with all your failed predictions

Originally Posted by Butterfly

^ what are you talking about ? fresh from this morning,

Well, I must have had a crystal ball to post this three weeks ago then:

https://teakdoor.com/us-domestic-issu...tml#post703589

Originally Posted by Butterfly

and nothing is a given in the financial world, you should know that by now with all your failed predictions

No failed predictions. Yet.

As you well know.

^and here:

https://teakdoor.com/us-domestic-issu...tml#post717599

(My bold)

Aug. 20 (Bloomberg) -- Fannie Mae and Freddie Mac's success in repaying $223 billion of bonds due by the end of the quarter may determine whether they can avoid a federal bailout.

Fannie, based in Washington, has about $120 billion of debt maturing through Sept. 30, while McLean, Virginia-based Freddie has $103 billion, according to figures provided by the government-chartered companies and data compiled by Bloomberg.

Rising borrowing costs and evidence that demand for their debt was waning last month led Treasury Secretary Henry Paulson to seek the authority to pump unlimited amounts of capital in Fannie and Freddie in an emergency. Their interest costs are again increasing amid concern that credit losses are depleting the capital of the beleaguered mortgage-finance companies.

Rolling over the debt ``is the single most important factor to their ability to remain liquid,'' said Moshe Orenbuch, an analyst at Credit Suisse in New York. ``So far, they've been able to do that.''

Investors in Asia, the biggest foreign owner of Fannie's $3 trillion of bonds, are reducing their share of purchases, potentially increasing the need for Paulson to make good on his pledge to backstop the companies.

``This whole backstop mechanism was set up so the actual need for it could be avoided,'' said Mahesh Swaminathan, a mortgage strategist for Credit Suisse in New York. ``The market is testing the Treasury's resolve.''

New Capital

The companies, responsible for 42 percent of the U.S. home loan market, need as much as $15 billion each in fresh capital to reserve against losses on mortgages and related securities that they either own or guarantee, Paul Miller, an analyst with Friedman Billings Ramsey & Co. in Arlington, Virginia, said.

The Treasury will probably be forced to buy as much as $30 billion of preferred shares in both Fannie and Freddie by the end of next month, according to Bill Gross, who manages the world's biggest bond fund at Pacific Investment Management Co.

``Treasury is monitoring market developments vigilantly. We are focused on encouraging market stability, mortgage availability, and protecting the taxpayers' interests,'' Treasury spokeswoman Jennifer Zuccarelli said.

From:

Bloomberg.com: Worldwide

The companies rely heavily on overseas investment, often up to two-thirds of each new multibillion-dollar note offering, to help pare funding costs and keep mortgage rates low.

But foreign central banks have dumped nearly $11 billion (5.9 billion pounds) from their record holdings of this debt in four weeks, to $975 billion (522 billion pounds), and won't return in force before it's clear if -- and how -- the government will back Fannie and Freddie, some analysts say.

Quoted from:

Fannie and Freddie face overseas confidence crisis | News | Reuters

This is your original black hole definition.

The FED will default on sovereign debt in the 3rd/4th quarter of 2008. Be warned.

“On July 16, 2008 . . . , the Federal Reserve reported holding $2,349 billion of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 billion, a 38.4% annual rate of growth. . . . So central banks were accumulating dollars over the past three weeks at a rate far above what one would expect as a result of the US trade deficit. The logical conclusion is that they were intervening in currency markets. They were buying dollars for the purpose of propping it up, to keep the dollar from falling off the edge of the cliff and doing so ignited a short covering rally, which is not too difficult to do given the leverage employed in the markets these days by hedge funds and others.”2

[at] : Information Clearing House - ICH

Last ditch attempt by the 'club' to try and salvage the situation?

^ Short covering rally, it makes sense doesnt it?

34 baht mark breached