GBP vs THB

[kendo]

Hi chaps, my wife has just phoned me from Bangkok she said that she can only get 60 baht to the british pound has it gone down due to the political unrest, and is it likely to get even worst than it is now, your views please.


Kendo.

[Super Joe]

Hi Kendo,

I think she may be right, today's rates:
Bangkok Bank 60.73 for cash, 61.60 for telegraphic transfers.
Siam Commercial 60.79 for cash, 61.69 for telegraphic transfers.

Graph courtesy of MalcolmInTheMiddle's link:

I don't think its the protests here as the Baht is strengthening against the Pound, rather than weakening.

SJ

[Wanderlust]

Once again the baht appears to be getting stronger (against the pound) as the political turmoil and unrest increases - can anyone please give a logical explanation for this? All normal indicators would suggest that the baht should weaken, or is the UK economy in such bad shape that the pound is weakening faster than the baht? Once again i feel that there is some serious intervention going on with the baht...

[miked]

hi kendo,
the political unrest should in theory cause the pound to strengthen against the baht. however the pound continues to weaken and that's because of the economic situation in the u.k contrary to what you will read on this forum the thai economy is in quite good shape and is largely unaffected by the credit crunch. thailand enjoys a large balance of trade surplus and has a more than adequate reserve of foreign currency.
i don't want to make a prediction, i only get stupid comments from members who do not understand the current economic climate. i would suggest however that to sell u.k pounds for 60 baht will very soon look attractive.
miked

[Wanderlust]

miked,
Thanks for your input, but as regards the Thai economy I have heard that there has been a huge number of cancelled bookings to Thailand (one figure was 90%) because of the unrest, and I believe the tourist trade is pretty important - surely the strength of the baht against the pound must be more than just the weakness of the UK economy? As you seem to be up on these things, what exactly is wrong with the UK economy as well?I thought the UK went through it's major 'downsizing' in the late 70's and '80's as regards manufacturing and heavy industry, so what is happening now? Is it purely the knock on effect of the 'credit crunch' and high oil prices or is there something else? As the oil and banking situation is worldwide there must be another factor I would think?

[miked]

the bank of thailand are intervening to try and weaken the baht. but
the thai economy is in good shape and the u.k. is in a dreadful state.
with respect and no intention of mocking anyone on this forum many members do not have a clue regarding economics.
some weeks ago I made a forecast that the thai baht would strengthen
to 60 baht early next year. unfortunately this forecast appears to be coming true much earlier.
from memory tourism accounts for 7% of thai gdp. exports account for 70% and exports are booming.
The u.k. credit crunch, oil, house prices and generally to much personal borrowing and the welfare state out of control. 30% gdp coming from financial services. northern rock dealt a massive blow to the reputation of the u.k.
it doesn’t look good and I fear is going to be very rough when interest rates start being cut early next year. i hope I’m wrong.
miked

[miked]

http://www.contrarianprofits.com/articl ... -woes/4127

this link offers a glimmer of hope, or is it clutching at straws.
miked

[caller]

Would Darlings (UK Treasurer) input on Saturday in an interview with the Guardian have had any impact?

I just avoided the desire to do myself some damage, so God only knows how others reacted?!

[miked]

darling is a pratt but i just think he told it as it is. i think
that the u.k. has lived beyond it’s means for along time,and
now it’s payback. perhaps his speech will make people see
reality.
i bought a house in 2001 for £170,000. sold it in 2005 for
£400,000. that’s crazy.
miked

[caller]

Not for you it wasn't!

[STEVE G]

Pound plummets to record low:http://uk.reuters.com/article/ukPoundRp ... nnel=10174

[Wanderlust]

the bank of thailand are intervening to try and weaken the baht. but
the thai economy is in good shape and the u.k. is in a dreadful state.
with respect and no intention of mocking anyone on this forum many members do not have a clue regarding economics.
some weeks ago I made a forecast that the thai baht would strengthen
to 60 baht early next year. unfortunately this forecast appears to be coming true much earlier.
from memory tourism accounts for 7% of thai gdp. exports account for 70% and exports are booming.
The u.k. credit crunch, oil, house prices and generally to much personal borrowing and the welfare state out of control. 30% gdp coming from financial services. northern rock dealt a massive blow to the reputation of the u.k.
it doesn’t look good and I fear is going to be very rough when interest rates start being cut early next year. i hope I’m wrong.
miked

It would seem that the Bank of Thailand obviously do not know their economics very well either then, doesn't it? They have made two small increases in their interest rate this year and it currently stands at 3.75%, and to put that in context for other readers, the UK rate is 5%, while the US is at 2%. If the BoT were serious in trying to weaken the baht they would be cutting interest rates, not increasing them, because higher rates encourage people to buy baht. Another problem is that the 'real' interest rate (bank rate minus rate of inflation) in Thailand is negative and has been for most of the last 4 years, and is a situation that is getting worse rather than better. Anyone who lives here knows how much prices have increased in the last few months. The economic situation in Thailand is not as good as the headline figures seem to indicate, while i imagine the UK is actually bottoming out right now, and Darling may have made the comments he did to make sure the UK recovery is seen to be spectacular, just in time for the election.

While your prediction of 60 baht to the pound may have come true (it is actually 61.5 according to Reuters), the fact that it has hovered around this level several times before did not make it a very difficult prediction! I cannot, however, see it as being anything sustained, and think that it will generally be nearer to the 65 mark as an average over several months, with peaks and troughs around that level due to the twists and turns of both the two economies and the currency speculators. If the current unrest in Thailand continues, over the next 2 years we could well see a total change with the baht hitting 70 plus, because the political instability will inevitably continue for some time after the street protests, and the apparent bubble in the Thai economy will burst soon, unfortunately for the people here (not that they are seeing any benefit of it anyway).

Incidentally I have a degree in Economics, but it is such an inexact science that I really don't think it has an awful lot of relevance, and time and again economists have got it wrong when trying to predict, and in the current global economic world it is too unpredictable to be certain of anything. There are just too many possible influencing factors, and too many things, both man made and things like natural disasters, that no one can see coming. For all we know there could be a Thai bank teetering on the precipice of collapse, and things like that would change things completely.

[sargeant]

Brilliant post WL I as a financial muppet it explains a lot and puts some of my guesses in the correct column it also wised me up on a few points thanks much appreciated
I did like the darling analysis i didnt have that one

[Super Joe]

baht 54/uk pound soon

Miked, I remember this one from you back in early March, I was a bit surprised by it at the time, the Baht actually strengthened against the Pound after that.

I reckon your 60/uk pound will come true though.

Cheers,

SJ

[miked]

wanderlust a very good post.
just 2 points.
the governor of the bank of thailand wants to hike interest
rates higher than the present level but is being prevented
from doing so by the government.

my recent prediction of a 60 baht rate was made several weeks
ago when the rate stood at 65.4
I still stand by my statement of 54, this i think will occur early next
year when the u.k. starts cutting rates. lets hope I’m wrong.
miked