Reader Submission: Euro – Thai Baht, perhaps the first ray of sunshine for exchange rate
Perhaps the first ray of sunshine for the exchange rate is in the picture. In recent months it has been a day of axes, especially on the stock exchanges of China. On Thursday morning, January 7, the stock markets closed early after a drop of 7% in one day. One of the reasons was that the Chinese Yuan had fallen against the US dollar.
In my opinion, everything is greatly exaggerated, but speculators benefit from this (unfortunately). There is a limited link (import and export) between the Chinese currency and the Thai baht, so that despite the fall in the Euro-US$ exchange rate, the Euro-Thai baht falls less. The US economy also expects a slowdown in growth, which could be positive for the euro and thus for the Euro-Thai baht exchange rate ratio.
The investments that Thailand is now making, especially in infrastructure, will pay off in the long run. However, they currently have to dig deep into their pockets and this will increase the National debt. Investments that contribute to GDP are hardly made. The increase in National debt could mean a weakening of the currency if GDP growth lags behind. But if the global economy stagnates, exports of industrial products will also decline. Tourism is only 10% of GDP. I wonder if they will achieve the 3% growth in 2016.
In addition, the oil price is USD 33,41 this morning and many oil-producing countries have to produce more to finance their high expenditures (public finances). More production means even lower oil prices. Does Wim Kan's joke in the New Year's Eve conference of 1980 (?) still come true. King Feisal goes door-to-door asking, “Should there be any oil today?”
All in all, a stormy start to 2016, but I have good expectations for the Euro-Thai baht exchange rate ratio.
The writer of this paper has no crystal ball and cannot factor in natural disasters and terrorist attacks, but I think there is a glimmer of hope in the improvement of the course ahead.
Submitted by Piet (used to work in the financial sector).
as far as I know there is no relationship whatsoever between the Bath and the Yuan or dollar (rather the Japanese Yen), and the euro bath rate continues to look very thick in my opinion, and if I may gamble, I bet that the Bath is more getting stronger, given Mario's ... policy and the many problems in the EU
So I think that holidays and accommodation in Thailand will become more expensive, until the artificially maintained economy collapses (we can benefit financially from that).
With all due respect Piet… What a story. Do you know why the stock market is closed? If the 300 largest companies (CSI 300 Index) lose more than 7%, this will take effect. Absolutely nothing to do with the Yuan! So don't go along with your whole story at all. Just follow the course for a whole day. Yesterday the Euro went down hard again and then recovered a bit! But still less than before! Why do we see light on the horizon with the Euro-Bht rate? And dear Piet…The US economy has nothing to do with Euro-Bht value. I think America has a Dollar and yes it has nothing to do with the Baht and certainly not what many people think that the Bht is linked to the Dollar. That would be the myth of 2016!
Dear Kay,
What caused the 7% fall in the Chinese stock market? Find out for yourself.
The fall of the Chinese stock market was a result!
The temporary shutdown of a stock exchange in the event of a drop of 5% in a day applies to almost all stock exchanges, but closing early is less common.
A growth slowdown in a country leads to lower exports!
A big advantage is that many industrial companies benefit from a lower oil price, which may be able to make more profit due to the lower energy costs.
There is more cohesion between the various exchange rates than you might suspect,
Why are people (including the USA) considering wanting to link money amounts to a mandatory stock of gold again?
Currency speculators (including Soros and Banks) cause the fluctuations in the market.
Piet
I would like it if Piet could indicate since when this 'limited link (import and export) between the Chinese Yuan and the Thai Baht' has existed, how it has been designed, and how this mechanism ensures that if the Euro becomes less becomes worth in relation to the dollar, the Baht apparently partly follows the Euro.
Dear French,
Thailand's annual exports are about US$230 billion. An annual US$ 25 billion (12%) is exported to China and US$ 38 billion is imported from China. Hence the limited peg, but this may be seen in the coming weeks depending on what steps China takes to support the Yuan.
Japan is the largest foreign investor with many factories in Thailand. Japan has an interest in GDP and export growth, but less so in the currency.
The exchange rate of US$ and Euro is simply the market forces of supply and demand.
Easy to follow and analyze on this site. You have to follow it regularly.
http://www.xe.com/?c=THB
For those who want to know more about the obvious influence of the Chinese economy and the yuan on the economy and currencies of the surrounding Asian countries:
http://www.jonathanholslag.be/wp-content/uploads/2016/01/201512-TWQ.pdf
I had been looking at something else in the crystal ball. I read about possible interest rate hikes in the US, which means the euro will go lower and that means more opportunities for Dutch exports abroad. But also usually less Bahtjes for me as a holidaymaker. But we're going to see it all.
As an ex-market maker on the Amsterdam options exchange, I can tell you that there is no economic logic behind currency trading. Since private investors were bullied out of the investment world on a large scale in the late XNUMXs, there have been a number of major players who manipulate prices.
This is not only the case with currency trading, but with all stock exchange trading. As a private individual, therefore, be careful when listening to investment advice, as it usually comes from a party that acts contrary.
A good example is that Goldman Sachs with the Euro at 34,4THB gave the advice to sell Euros because it would eventually go to 0,8 Dollar. From that moment on, the Euro started to rise again. They were just trying to bully the last people out of the Euro and were buying in bulk themselves.
Mighty, your rendering!
Think and hope you are right.
KhunBram iSaan.
For many, the fear of a further rise in the baht is apparently a reason not to believe stories, allegations, predictions about a more favorable exchange rate for the euro.
As hard as the baht rose in the past, it has also fallen again. Predictions are worth nothing. Look at all the claims that have been made about the price of oil. That would stabilize at $100. Well, the oil is now around $35 and it's never been cheaper. And that is remarkable, because the economy is improving somewhat, which is leading to more production and therefore more demand for oil. In short, all predictions are worthless. Do not let them get to you. And as Piet wrote; It's all speculation, because that's how you make money on the stock market.
Despite the little confidence that some have in the ECB, it can be said that the exchange rate of the Euro will not fall dramatically, despite interest rate hikes in the US. And don't forget that the ECB doesn't mind parity between dollar and euro at all. Moreover, the exchange rate of the euro fell to 0,7 US dollar shortly after its introduction. But there were also peaks. That is how it is and that is how it will continue to be. Historically, the euro is not that bad against the baht. There have been better times, but also worse and both will return