Pleasantly surprised by exchange rate

[Guest anonone]

Just took a look at currency conversion and see that a US dollar is now getting 32.6 baht. 

Wonder if all the activity in Bangkok is weakening things a bit?  Can't believe it is due much to the US economy which seems to be rather stagnant, outside of some market gains. 

 

 

[fedssocr]

Actually US economic growth has been revised upward for much of the year, meaning stronger growth than originally thought. Now that people are finally starting to focus on the gigantic gap between the top and everyone else it will be interesting to see if anything gets done about it.

 

But apparently the Fed's announcement during the week that they would consider slowing down QE helped boost the USD. All of the emerging market currencies took a hit. I have a fair bit invested in SE Asian market indexes (and some other emereging market funds) and they have all really been slumping. But they are long-term investments so hopefully 20 years from now they will be booming.

[Guest]

I have a fair bit invested in SE Asian market indexes (and some other emereging market funds) and they have all really been slumping. But they are long-term investments so hopefully 20 years from now they will be booming.

Also, if you're planning to spend a significant proportion of your time there, investing in Asia reduces your risk.

There are some good investment options e.g. LSE:AAS

[Guest anonone]

Interesting.  Thanks for the info.  I do not pay as much attention to the financial markets as I should.  Need to remedy that.

In my defense, I have been busy with my personal Thai economic stimulus package work of late. 

 

And now 32.75   Wow.  I was pretty excited to see 32, but now looks like 33 is on the horizon.

 

Do either of you have any predictions about how far this is going to carry on?

[Bob]

It'll go on as long as the foreign capital flows out of Thailand....which has happened for about 6 months now (and I, just guessing, don't see why that won't continue for at least the next 4-6 months).  A lot of money flowed into Thailand which was chasing good returns (bank account interest, for one) and the Thai economy has been going downhill most of this year, the banks keep lowering the interest they'll pay (they were paying 3.75% in October for 22-month funds whereas that's now approaching 3% - a pretty swift lowering), the western economies are improving, the long-term interest rates are beginning to rise in the west (well, at least in the US), and, of course, there isn't a lot of confidence in the Thai political situation.  Most of the drop, though, occurred before the current unrest although it's accelerated quite a bit in the last few weeks).

 

The Thai baht has lost 14% against the dollar since May. And of that amount, over 2% of that occurred in the last 10 days.  Rather dramatic drops there. 

 

On the other hand, Thai exports sure ought to pick up in 2014 as the price of their goods will be significantly lower  Given the percentage of gdp that Thai exports (of services and goods) represents - over 70% - a falling baht can provide some good things here (in the US, exports of goods and services only represents about 14% of gdp).

[vinapu]

Big question mark hanging is political situation as protests may go out of hand and either HM  or army may decide to venture in

[fedssocr]

I read some analysis in either the Bangkok Post or The Nation the other day that indicated the banking expert interviewed suggested 33 or 34 were likely to be hit within the next few months.

[Guest anonone]

Seems to be sooner then a couple of months.

 

32.84 at the moment.

 

 

thanks Bob for the detailed explanation. Much appreciated

[Guest buckbee]

Aussie dollar gradually down down down over the last year, now 29.105 THB