Baht Fundamentals

[Dodger]

It looks like all the genius's are tossing their darts at 34.5 as the most probable result for the baht in 2024 (and beyond).

Ironically, 34.5 is close to the running average already, so no big news there. I guess that's what financial genius's do when they don't know the answer. ..

[Rocket]

"Should the Republican candidate be re-elected as president, his policies are likely to strengthen the dollar and weaken the baht for the rest of 2024 to a target of 34.5 to the dollar by the year-end," Mr Komsorn said.

So it looks like you should vote for Trump if you want a strong dollar. So voting for Trump will be in your interest. Choose wisely.

[Undaunted]

[Undaunted]

[Dodger]

Baht starting to weaken again - heading back to its average @ 35 THB to the USD.

Always nice to see...

[Dodger]

For what it's worth, most forecasters are predicting a stable trend in 2025 for the exchange rate between the USD and Thai baht averaging around 34.2 for the entire year.

This looks OK to me, but for the life of me I can't figure out how anyone can predict a stable trend with the idiot that's going to be taking control of the U.S. government in a few weeks...or the fact that we're on the verge on World War III. The latter of course posing a much lesser threat.

Here's hoping for the best.

[Gaybutton]

For what it's worth, most forecasters are predicting . . .

Not worth very much. We've all seen how the forecasters get it wrong so often that I'm surprised anyone even tries to forecast exchange rates anymore. Nothing the forecasters come up with is anything I, for one, am willing to rely upon. It just has not been working that way and I have seen nothing to cause an expectation that it won't continue working that way. As far as I can tell, when it comes to predicting the baht exchange rates, there are no experts.


"An expert is a fellow who's afraid to learn anything new because then he wouldn't be an expert anymore."
- Harry Truman

[Dodger]

We've all seen how the forecasters get it wrong so often that I'm surprised anyone even tries to forecast exchange rates anymore.

When I was planning my retirement finances I totally ignored the forecasts and was only interested in historical data. I remember looking at data going back 20 years showing the exchange rate variation - and then I calculated the average, range, and standard deviation, over that period for planning purposes.

My numbers showed that I could expect the range for the next 10 years (starting in 2018) to be between 29 baht (as the low) and 37 baht (as the high). And even with the abnormal variation we've had since 2018, i.e., global pandemic, wars in the Mideast, inflation, etc. the range has held within those limits.

I think I just got lucky, but in any event I tend to take all these expert forecasts with a grain of salt.

[Jun]

That's very rational and I like it.
On the other hand, I see no reason to limit past comparisons to THB. What happens to one currency can happen to another, if conditions are right.

Here's a GBP-JPY graph. Two G7 economies. Select time period "All"

Note how, at one stage, the exchange rate moves from 251 down to 116 in under 2 years. I bet no one forecast that. Exchange rates can move all over the place.

All it takes is a few unexpected events.
Imagine, for example, if Trump interferes with the independence of the fed and managed to promote a low interest rate policy for a long period of time.

[Dodger]

All it takes is a few unexpected events.

Your point is well taken.

This is going to sound crazy to most - but I know you're an Engineer:

Knowing that the 20 years of data I had in front of me included many unexpected events that occurred during that period including the pandemic - I just considered this normal variation. After calculating the standard deviation I then added and subtracted 3 standard deviations from the 20 year average (six sigma) which gave me control limits I needed (29 to 37 baht).

If a catastrophic event occurs (abnormal variation) like World War III or a complete collapse of the global supply-chain, etc., then the control limits would be meaningless and all bets are off.

The catastrophic event I'm most worried about is Trump!