Baht Continues to Weaken

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Jun
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Re: Baht Continues to Weaken

Post by Jun »

Gaybutton wrote:
Tue Oct 11, 2022 2:39 pm
I'm usually wary of exchange rate forecasts because it never seems to work out that way. But I sure hope this forecast happens that way. If the exchange rate gets into the mid to high 40s per US dollar and stays that way for years, I certainly will be happy. It has been many years since we have seen rates like that.
I suspect the main reason for the USD rise is the faster rise in interest rates to curb inflation. Obviously rates go up and down with the cycle.
Also, Thai interest rates are a factor.
Starting with Thai inflation, there is a graph from Trading Economics below. If that's accurate, then it's about time Thailand started increasing interest rates.

As for all the talk of a weak pound, we still get far more baht for our money than 2 years ago.
Going to a USD economy, such as Cambodia will be a tad more expensive, but a holiday in Thailand will not break the bank.

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Re: Baht Continues to Weaken

Post by Gaybutton »

The higher exchange rate plus the 8.2% Social Security raise coming in January to eligible Americans, which probably means most board members, is certainly good news for Americans. The Social Security raise, if the exchange rate remains at 38 or above, will mean anywhere from around 6000 to 10,000 more baht for us, depending on how much your Social Security benefit is.

But don't forget Americans, Social Security is taxable. See: https://www.ssa.gov/benefits/retirement ... taxes.html

Whatever happened to tar and feathering tax collectors . . . ?

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Re: Baht Continues to Weaken

Post by Up2u »

A big recovery day on Wall Street so I'm happy. USD tumbles to below 36, the good and the bad, a mixed bag.

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Re: Baht Continues to Weaken

Post by Gaybutton »

Up2u wrote:
Fri Nov 11, 2022 12:45 pm
USD tumbles to below 36
That is coincidental with the USA's midterm election, so I'm guessing that has something to do with it and the exchange rate will soon again move in our favor. I certainly hope so, anyway.

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Re: Baht Continues to Weaken

Post by Jun »

I think the US inflation data was better than expected yesterday, which means that they expect fewer interest rate rises & therefore the currency falls back.
I've never quite understood why the currency markets give more weight to the interest rate expectations than the inflation. But that seems to be how it works.

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Re: Baht Continues to Weaken

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Yes, the cpi( inflation numbers), came in slightly lower for the first time in a while. So they think that rates will peak at about 5%. So rates dropped and the dollar weakened. The dollar is down again right now to about 106.

The fed wants inflation to come down to 2%, from 7.8 now. Good luck with that. I hope they keep rates high for as long as possible to get inflation down. It won’t be easy because there’s so much demand for goods and services still. De globalization doesn’t help either. We had low prices for years because of free trade. And all the money printing due to Covid didn’t help.

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Re: Baht Continues to Weaken

Post by Rocket »

Up2u wrote:
Fri Nov 11, 2022 12:45 pm
A big recovery day on Wall Street so I'm happy. USD tumbles to below 36, the good and the bad, a mixed bag.
What’s good for you may be bad news for others. I’m in the market also, but have more cash than usual. I feel for the poor who don’t own stocks or real estate and have to suffer with inflation. They have no hedge against inflation.

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Re: Baht Continues to Weaken

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Speculation bumps up baht

by Somruedi Banchongduang

November 12, 2022

The baht surged to its strongest level in almost three months on Friday after China eased some of its quarantine rules for travellers and speculation the United States Federal Reserve would be less aggressive with its rate hikes.

The baht strengthened to 35.70 per US dollar on Friday, its highest level since Aug 22, according to Kasikorn Research Center (KRC).

As of 1.15pm in Thailand, the baht stood at 35.83 against the greenback, up 2.9% from 36.88 baht when the market closed on Thursday.

The centre's research executive Kanchana Chokpaisarnsilp said the stronger baht was in line with China's yuan, supported by news that Beijing eased some of its Covid-19 curbs.

According to AFP, Beijing announced the relaxation of some of its hardline Covid-19 restrictions yesterday after the authorities had earlier vowed to stick with its zero-Covid policy despite mounting economic damage.

Ms Kanchana said the US dollar also faced a sell-off following a report of cooler than expected US inflation data on Thursday and the possibility the Fed might be less hawkish in raising the policy rate in its next rounds.

According to Bloomberg, most emerging market Asian currencies soared yesterday as growing bets for a slower path of Fed rate hikes hammered the dollar.

South Korea's won jumped 3%, the baht advanced by at least 2% and the Taiwanese dollar strengthened by the most since March 2021.

The Philippine peso gained the most in a span of more than two decades.

Softer than expected US inflation data increased speculation the Fed will be less aggressive in raising interest rates, raising the prospect that the dollar has reached a peak.

A slower pace of US hikes may offer some respite for emerging market assets, which have tumbled this year amid an exodus of cash from risk assets.

"A softer dollar should create a conducive environment for stretched Asian currencies to rebound," said Christopher Wong, foreign exchange strategist at Oversea-Chinese Banking Corp in Singapore.

"Some of those that could benefit more on a relative basis include the baht and the won."

https://www.bangkokpost.com/business/24 ... ps-up-baht

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