rott
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Post by rott on Jul 13, 2023 20:06:21 GMT 7
Beer is also spelt ale. I've just had a few and I wasn't going to.
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chiangmai
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Post by chiangmai on Jul 13, 2023 20:14:09 GMT 7
Everyone is betting against USD, most currencies are gaining against it, the Pound is at 1.30 for goodness sake.....which is why GBP/Baht is what it is.
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chiangmai
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Post by chiangmai on Jul 14, 2023 6:52:15 GMT 7
If you study the Pound/Dollar exchange rate graph you'll see that we're now coming out of the US interest rate increase period that has dominated the headlines for the past 12 months. The line appears to be headed back to the median exchange rate that has existed since about 2016, that median was in a range of about 1.25 to around 1.38, averaging around 1.30 (which is where we are today). With the US DI currently at 100 (par value), the current GBP/USD exchange rate of 1.30 seems reasonable from a planning perspective albeit ex. rates rarely move in straight lines and there will be some overshoot before it returns to the longer term average. IF Pound/Dollar does average 1.30, Dollar/Baht will sit around 34 or 35, that means Pound/Baht will be at 45 (under/over shoots not withstanding). The BIG question that follows is, which part of whose economy will then react to change that relationship? Will the US economy go into recession and continue to weaken? Will the UK economy recover or will global recovery cause Thailand's tourism numbers and Customs exports to increase? My money is on the latter, but that doesn't preclude the other things from happening also! I'm certain that none of three countries involved in this analysis wants their currency to be strong right now because that makes their exports expensive, which delays recovery. On the other hand, a strong currency means foreign currency debt repayments are cheaper which should suit the UK well. But since Thailand has almost no foreign currency debt,their incentive is to leave the Baht weaker rather than stronger. If nothing else, this helps explain why trying to guess at future exchange rates is nonsense. The best you can hope to do is to establish some of the factors that impact individual economies and to identify a trend, even though that trend may be beset by frequent anomalies. FWIW I bought my truck, I think that was the lowest currency risk path. I think 45 is very good value and unlikely to be bettered by much, for very long.
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chiangmai
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Post by chiangmai on Jul 19, 2023 8:46:43 GMT 7
A somewhat confusing picture at first. The Baht has gained against the Pound and against USD also yet the US DI remains at 100.....the Pound is gaining against USD but not to the point where it translates into gains against THB.
I interpret this as investors buying the Baht, probably on the back of an improved outlook on the political front. That being the case, any gains are likely to be short lived because they are based on sentiment rather than on fact or improved economics.
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siampolee
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Post by siampolee on Jul 19, 2023 8:58:04 GMT 7
Methinks that short-term speculation may well be a profitable exercise, however, like you I am of the opinion that as a long time investment, it is likely to be neither a wise move nor a profitable one.
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rott
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Post by rott on Jul 19, 2023 12:15:05 GMT 7
This improved outlook on the political front.? My failure to grasp this is very likely the reason you are pushing me for high political office elsewhere. A cunning ploy as some would say.
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chiangmai
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Post by chiangmai on Jul 19, 2023 14:50:55 GMT 7
This improved outlook on the political front.? My failure to grasp this is very likely the reason you are pushing me for high political office elsewhere. A cunning ploy as some would say. I agree that it's a hard concept to grasp. I think it goes like this: Pita lost the first vote so now there's a good chance that an alternate candidate will be put forward, one who has a chance of winning and actually forming a government.
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siampolee
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Post by siampolee on Jul 19, 2023 16:21:30 GMT 7
Beware of what may be to come...
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chiangmai
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Post by chiangmai on Jul 20, 2023 7:08:56 GMT 7
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rott
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The Baht
Jul 20, 2023 12:37:57 GMT 7
via mobile
Post by rott on Jul 20, 2023 12:37:57 GMT 7
This improved outlook on the political front.? My failure to grasp this is very likely the reason you are pushing me for high political office elsewhere. A cunning ploy as some would say. I agree that it's a hard concept to grasp. I think it goes like this: Pita lost the first vote so now there's a good chance that an alternate candidate will be put forward, one who has a chance of winning and actually forming a government. My difficulty was the assumption that a democratically elected MP being rejected by the criminals would start riots from MF supporters, thus creating instability. Imagine my surprise therefore to read of substantial sums of foreign investment going to the SET. Mixed responses from the Post and not much rioting so far. That will teach me to query changer's words. Not forgetting SP.
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chiangmai
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The Baht
Jul 20, 2023 13:31:08 GMT 7
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Post by chiangmai on Jul 20, 2023 13:31:08 GMT 7
The things you imagined were logical, except the need for a stable government seems to override all else.
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chiangmai
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Post by chiangmai on Jul 21, 2023 5:48:32 GMT 7
It's companies earnings reporting season in the US so Equities soared and currencies fell, sadly the numbers being reported aren't all that great. Markets are still digesting what this means and in the meantime, equities have stalled and currencies have started to halt their slide and stabilise. Poor/low earnings means that the Fed's interest rate increases have been effective at slowing the economy and taming inflation, this may help prevent further interest rate increases. Had the earnings been very good, it would point towards further rate increases, this would mean another rout of the equity markets and strengthening USD because of the interest rate differential. I'm not going to try and guess at direction but it could be that the reported earnings were sufficient of a mixed bag of good and bad as to be inconclusive. It might be that equities will burn off some of their recent gains and then move sideways and that currencies will do the same, until the next big event comes along which I guess will be the jobless report and the CPI numbers. The US DI is moving upwards and is close to 101% so there is hope for an improved ex-rate but the future direction seems very unclear at present. The Fed keeps telling us the its actions are driven by the data and that taming inflation is their number one priority, they will not rest until that job is done 100%, equities investors take note!
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chiangmai
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Post by chiangmai on Jul 21, 2023 8:33:59 GMT 7
Sure enough, Bloomberg is now reporting that the S&P is down 0.68%, case in point that Elon Musk's wealth has fallen by USD 20 bill. This is because the S&P (equities) has fallen hence there are losses across the entire index.
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chiangmai
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Post by chiangmai on Jul 21, 2023 10:45:45 GMT 7
The paper whose name shall not be spoken is once again linking economic events here to the political scene. This time they say the SET is down because of political uncertainty. Is it? Well, coincidentally the S&P and the Nasdaq fell overnight so the Thai bourse was presented with falling stocks which I think has much more to do with what happened and why, you decide:
FWIW the Thai SET recovered to positive territory in the past 15 minutes thus the uncertainty appears not have been lasting! The problem I have with all of this is that we buy and read news papers to get fact, not to read the opinion of somebody who thinks that every economic event that happens here must have been caused by something within our borders and the outside world doesn't have any impact at all.
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Mosha
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Post by Mosha on Jul 21, 2023 14:01:32 GMT 7
The Pound is creeping back up v the Baht. Around 44 24 just now. Company pension sent today so I'm happy to see that.
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