The Thai Baht -- How High Can it Go?

[buadhai]

As a fixed income retired geezer I'm a little concerned seeing the dollar drop to 38 per baht.

Any predictions?

[ChiangMai noon]

^
Likewise, I have my savings in a sterling account with SCB, don't often touch it but needed to make a hefty withdrawal last week, was rather dismayed to find that the pound had slipped below 70 baht.

[Butterfly]

Temporary thing, and I am over exposed to the US dollar too. A curse. Maybe the SHIN buyout has something to do with it. Should reverse soon.

[buadhai]

Temporary thing, and I am over exposed to the US dollar too. A curse. Maybe the SHIN buyout has something to do with it. Should reverse soon.

I wish I shared your optimism....

The "Economist" magazine regularly publishes a Big Mac Index which indicates that the baht is severely undervalued, even when it was at about 40 to the dollar.

Not a scientific economic evaluation, but interesting nonetheless.

It shows the Big Mac costing US$1.51 in Thailand vs. US$3.15 in the US.

[laoshi]

Yeah I think the baht is trending towards a period of strength. Possibly getting a lift from the Shinawa announcements this week. I reckon could see 60 to the pound fairly soon. Depends if we can gain on the dollar which is looking less likely as their interest rates are rising and are now higher than ours. Change now lads, 67 could look like a dream in a few months time...

[The Ghost Of The Moog]

Laws of currency hedging.


1) Whatever Butterfly suggests, take the contrarian viewpoint.

2) Alternatively: if you fear a strong baht, buy Thai Airways shares as a hedge, as they make windfall gains when the Baht strengthens due to their liabilities portfolio. In other words they borrowed US Dollars and it won't cost them as many Baht to repay the loans.

[Airportwo]

I was going to change money last week, thinking after election the Baht would drop - i held off, Mistake it went the other way, hard to understand why.

[Butterfly]

I wish I shared your optimism....

The "Economist" magazine regularly publishes a Big Mac Index which indicates that the baht is severely undervalued, even when it was at about 40 to the dollar.

Not a scientific economic evaluation, but interesting nonetheless.

It shows the Big Mac costing US$1.51 in Thailand vs. US$3.15 in the US.

I think it's the other way around. It's the US BigMac which is overvalued. It's not secret that the US has become too expensive and can't sustain this kind of price levels without the growth supporting it. The US is manufacturing growth through the magic of statistics, but there are not real growth at the moment. Maybe the US BigMac index should be on the same level as Thailand.

With worldwide inflation looming, I don't see how things can improve and how currency in third world countries like Thailand can sustain such a high value. It doesn't add up. Look around and tell me you don't find anything wrong with all those "predictions" and "estimates".

[laoshi]

the baht is currently 66.63 to the pound and is 42 satng down today alone. It's fucking roaring ahead

[ChiangMai noon]

3 month low prediction is just over 60 and high is 68.8....

Better off in hedging with baht going by those figures.

http://www.ratesfx.com/predictions/pred-thb.html

[laoshi]

Look at it positively. If you're living in Thailand and have a salary and property. You've had a 10 percent increase over the past few months on currency rates alone ...

[aging one]

Damn I feel for you but I am in a weird situation I am actively buying dollars. Yup I plan a major change and reinvestment is coming in 3 years. I just hope it stays down another 2 or 3 weeks. Then I dont give a damn.

Just let me finish covertly buying my bucks.

[laoshi]

I think the point is AO that everyone is talking about a possible dip to 60 baht. That's the time to buy chunks mate...

[aging one]

Dont think so mate. But I am looking at the 38 baht threshold. Damn I do hope it does in the very short run. Dont want people to get messed over. I am sort of the odd one odd here.

But dont worry all it will go back up again. Always has.

[mad_dog]

^
Likewise, I have my savings in a sterling account with SCB, don't often touch it but needed to make a hefty withdrawal last week, was rather dismayed to find that the pound had slipped below 70 baht.

I got 66 at de airport !! WTF

[laoshi]

Asia
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VideoBank of America's Parpart: Thai Baht, Bank of Korea, Won adType = "std"; Category = "03"; HCat = "RNI1"; Keys = "null"; Width = "336"; Height = "280"; Tile = "1";CallAd(adType, HCat, Width, Height, Tile, Keys, Category);var iframeRequest = false;dcmaxversion = 9dcminversion = 3DoOn Error Resume Nextplugin = (IsObject(CreateObject("ShockwaveFlash.ShockwaveFl ash." & dcmaxversion & "")))If plugin = true Then Exit Dodcmaxversion = dcmaxversion - 1Loop While dcmaxversion >= dcminversionAU Optronics to Acquire Rival Quanta Display for $2.2 Billion in Shares

Asian Stocks Rise to 16-Year Highs; Advantest, NEC Gain on Industry Report

Exxon, Pertamina May Delay Oil Drilling in Indonesia Field on Rig Scarcity
adType = "std"; Category = "03"; HCat = "RNI1"; Keys = "null"; Width = "336"; Height = "280"; Tile = "3";CallAd(adType, HCat, Width, Height, Tile, Keys, Category);document.write('');Currency Strategists: Credit Suisse Raises Thai Baht Forecasts April 7 (Bloomberg) -- Credit Suisse raised its forecasts for the Thai baht versus the dollar this week on expectations political turmoil in Thailand will wane following the resignation of Prime Minister Thaksin Shinawatra.
Thailand's currency rose to the highest in almost six years yesterday following Thaksin's decision to step down on April 4 amid daily protest rallies and a political standoff that crippled his government. His resignation came after the three main opposition parties boycotted snap elections he called on April 2.
``We view Prime Minister Thaksin Shinawatra's resignation as the key to a resolution of the recent political crisis,'' Ray Farris and Shuen Hooi Yeoh, currency strategists at Credit Suisse in Singapore, wrote in a research report dated April 5. ``We have turned more bullish on the baht.''
The baht traded at 38.25 per dollar as of 12:02 a.m. today in Bangkok, after reaching 38.14 yesterday, its strongest since May 2000. Thailand's benchmark SET Index of stocks rose 3.1 percent on April 5, the biggest gain since May 2004. The market was closed yesterday for a holiday.
Credit Suisse, the second-largest Swiss bank by assets, expects the baht to rise to 37.5 per dollar in three months and 37.0 per dollar in a year, the strongest since January 2000. The bank's previous forecasts for those periods were 39.5 per dollar and 39.2, respectively.
ABN Amro Holding NV and JPMorgan Chase & Co also predict the baht will gain. ABN Amro said the currency will reach 37.5 per dollar within three months and JPMorgan said it will trade at 38.2 by the end of June.
`Capital Flows'
Protest groups had been holding rallies demanding Thaksin leave office after his family in January sold its stake in Bangkok-based telecommunications group Shin Corp., netting a tax- free $1.9 billion.
Thaksin said he'll stay on until a new prime minister is chosen and will retain his leadership of his Thai Rak Thai party.
``Shinawatra's resignation creates room for confidence and capital flows to resume because it should end the recent large protests in Bangkok and the risk of violence,'' the Credit Suisse strategists wrote.
Overseas investors on April 5 bought 15 billion baht more shares than they sold, the widest margin since Jan. 4.
Thailand's SET Index has risen 7.6 percent this year, trailing other markets in the region. Indonesia's Jakarta Composite Index has gained 16.6 percent and Singapore's Straits Times Index is up 8.3 percent.
Rate Increases
Interest-rate increases by Thailand's central bank may also spur baht strength, according to the strategists.
The Bank of Thailand may raise its target rate by at least another 75 basis points from 4.5 percent at present, the analysts wrote. A basis point is 0.01 percentage point. The U.S. Federal Reserve's benchmark rate is 4.75 percent.
``We expect monetary policy tightening to support the baht,'' according to the report.
The central bank raised rates on March 8 for the 11th time in 19 months, helping the currency to a 7.3 percent gain this year.
Thai inflation accelerated in March as fuel, food and beverage prices rose, putting pressure on the central bank to keep lifting borrowing costs.
Credit Suisse also said the surplus in Thailand's current account, the broadest measure of the country's international trade, will increase demand for the currency.
Thailand posted its eighth straight monthly current-account surplus in February as exports of cars, electronics and farm products rose, and a rebound in overseas visitors increased tourism earnings.
The surplus widened to $666 million from $504 million in January, according to the central bank. A larger surplus means Thai exporters have more foreign currency to convert into baht.

[Goddess of Whatever]

William, I want to hear your opinion.

[ChiangMai noon]

So, in the last couple of months my house in Thailand has increased in value by 10% or so.
Maybe time to sell up and take my winnings back to the UK.

I am also earning a few more dollars than I was.
Life is fucking great.

[friscofrankie]

38 or lower buy
41.5 or higher sell
it fluctuates through this range every damn year.
Lowest I've seen it: 36,
highest: 44
last 6 years or so.

[NickA]

Got lucky when I bought my house, transferred x thousand pounds over to buy my (wife's) house last year and got an exchange rate of over 75 baht/pound (we were hoping for 70-72, just lucky on the day), which meant I had a few hundred thousand left over to buy furniture and stuff.

If I sold up at the same price and then transferred money back at, say, 65 baht, I'd have nearly 10,000 quid more than I started with, fooking great!

(anyone who is clever at maths could work out x, but I don't think I'm going to tell you)

[ChiangMai noon]

^
I always seem to fuck these things up.
The opposite seems to have happened to me.

[Butterfly]

Laws of currency hedging.


1) Whatever Butterfly suggests, take the contrarian viewpoint.

Well that's because I keep confusing how currency goes up while the other go down. But I think I got it by now

[buadhai]

I got lucky when I bought my car last year. Transferred about US$16,000 when the baht was down to 42 to a dollar.

Of course, I also remember when it was about 25....

[Mr Earl]

Laws of currency hedging.


1) Whatever Butterfly suggests, take the contrarian viewpoint.

2) Alternatively: if you fear a strong baht, buy Thai Airways shares as a hedge, as they make windfall gains when the Baht strengthens due to their liabilities portfolio. In other words they borrowed US Dollars and it won't cost them as many Baht to repay the loans.

This makes a lot of sense.
Also since the US has the best airplanes (Boeing, Gulfstream, Cessna) Figure on their market share going up with a weak dollar.

[forreachingme]

Being one exporter is tough...

We now loose nearly 10 % on what our European customer pay us with this foreign exchange fluctuations...

If we input in our price quotes that we will change the prices further if fluctuation reaches 10 % from actual value, not many agree....

Anyway the best is if the economic recovery for still end of 2001 would show more strength and steadiness as period of declines and strength were said to be 7 years waves in the past decennies and predicted at 5 years periods actually...