Strong baht may finally weaken, according to Bloomberg

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Strong baht may finally weaken, according to Bloomberg

Post by Gaybutton »

Tide Turns Against Top-Ranked Asian Currency as Growth Slows

By Marcus Wong

December 23, 2019

The Thai baht’s heady gains are petering out, thanks to slowing growth and a central bank that’s bent on taming the currency’s strength.

After clocking an 8% rise this year, Asia’s best-performing currency is losing momentum as easing U.S.-China trade tensions damp its appeal as a haven. Falling yields on local bonds and equity outflows are adding to the pressure.

The baht has defied the broad weakness in regional currencies as investors sought refuge in Thailand’s safe but low-yielding debt. A hefty current account surplus and a sizable pile of foreign reserves helped reel in global funds.

But, the tide has started to turn. The baht has climbed just 0.2% in December, making it among the region’s worst-performing currencies. It has dropped 0.2% to around 30.18 per dollar since rallying to the strongest in more than six years in October.

The baht may continue this underperformance if U.S.-China trade relations improve further as Bloomberg’s analysis of 19 emerging-market currencies shows it’s among those that are least responsive to the yuan’s move.

The baht’s retreat in December came as the central bank lowered its economic growth forecasts, citing global risks. Thailand’s economic growth outlook of 2.8% next year is “disappointing” and lower employment is a big risk to the economy, Governor Veerathai Santiprabhob said Monday.

Trade data released Monday point to more weakness ahead, with both customs exports and imports recording bigger-than-expected declines in November.

The baht is expected to decline 0.7% to 30.4 per dollar by end-2020, a performance that would put it behind all but three of its Asian peers, according to a Bloomberg survey of analysts.

Equity Outflows

If Thailand’s growth weakens, this could fuel further selling in Thai stocks and weigh on the baht. The 12-month foreign outflow from domestic equities is already above the five-year average.

Bonds may also fall out of favor as yields decline after the central bank slashed the policy rate to a record low this year. Ten-year Thai sovereign debt yield about 1.6%, less than similar-maturity U.S. Treasuries.

Should the baht defy expectations for a drop, the central bank may step in again to check its strength. Veerathai said Monday the Bank of Thailand is “actively managing the exchange rate” and closely monitoring short-term foreign inflows.

Policy makers had earlier rolled out a slew of measures including cutting the supply of short-term bonds and easing rules on outflows to rein in the currency’s advance.

https://www.bloomberg.com/news/articles ... s-reversal

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Re: Strong baht may finally weaken, according to Bloomberg

Post by stkyricesf »

I hope this is true and also hope it happens sooner rather than later. Really would like to make my plans to visit Thailand and my friends there.

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Re: Strong baht may finally weaken, according to Bloomberg

Post by Jun »

I wouldn't base any financial planning on the analysis of a journalist.

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Re: Strong baht may finally weaken, according to Bloomberg

Post by jimnbkk »

Today I checked XE.com for the exchange rate: 29.91 THB per dollar. First time it's gone below 30. I've already made my exchanges for next trip, but I bet this new drop in the rate will have another negative impact on tourist visits to LOS

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Re: Strong baht may finally weaken, according to Bloomberg

Post by Gaybutton »

The most current exchange rates can be checked here:

https://www.scb.co.th/en/personal-banki ... tml#fxrate

The Thai banks will all be closed December 31 and January 1. The latest exchange rates will not be posted on this site again until January 2. Until then, the site will show the exchange rates as of the closing rates on December 30.

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Re: Strong baht may finally weaken, according to Bloomberg

Post by gera »

jimnbkk wrote:
Mon Dec 30, 2019 9:11 pm
Today I checked XE.com for the exchange rate: 29.91 THB per dollar. First time it's gone below 30. I've already made my exchanges for next trip, but I bet this new drop in the rate will have another negative impact on tourist visits to LOS
Not necessarily. Dollar is currently dropping with respect to all major currencies from Swiss franc to New Zealand Dollar. Probably due to reallocation of funds from US stock market to other destinations. Many currencies are actually up versus Thai baht.

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Re: Strong baht may finally weaken, according to Bloomberg

Post by Up2u »

Hope Bloomberg is right but it now dropped below 30.

https://www.xe.com/currencyconverter/co ... USD&To=THB

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Re: Strong baht may finally weaken, according to Bloomberg

Post by Gaybutton »

Yesterday, December 30, I received my retirement pension via TransferWise. It came in at 29.95. which is the worst I've seen it for quite some time.

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Re: Strong baht may finally weaken, according to Bloomberg

Post by Undaunted »

Baht hits 6 year high against the dollar:

https://thethaiger.com/hot-news/economy ... -six-years
"In the land of the blind the one eyed man is king"

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Re: Strong baht may finally weaken, according to Bloomberg

Post by Gaybutton »

Aren't you glad the baht is weakening so much . . . ?

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