exchange rates (again)

[hybrid 1]

Hi all ..

well i'm on my way back home to LOS after a month in blighty

bringing more of my hard earner money with me lol

 

but cannot decide what to do on changing the money.

1 year ago (or less) it was nearly 71/£ .. now its 62£

a lot of money to lose on £50k

 

is it expected to go back up ? or are these bad rates here to stay

[joekicker 53]

hybrid, Do you have a choice whether to change money?

 

By the way, if you find out the answer to your question, let us know so we can clean up, okay?

[hybrid 1]

hybrid, Do you have a choice whether to change money?

 

By the way, if you find out the answer to your question, let us know so we can clean up, okay?

 

i havea choice as far as waiting , yes. can just change waht i need on a weekly basis, of course this means can't bank it so there is always a slight risk of theft

the concern is of course it will drop even lower !

[hound 0]

Don't know about the British pound, but financial analysts in the USA predict the value of the dollar will be going back up.

[shauna 114]

Hi Hybrid

 

I suppose the best way to be ahead of the curve is Interest rate differentials between UK and Pattaya.

 

Take the US for example. Ben Benanke wants to kick start the US economy. So he has reduced interest rates. Reduced interest rates makes all the big boys with the real big (oil sheiks etc and pension funds as examples) money move it to 3rd world places like Thailand or Brazil etc etc.

The US will have a problem of inflation because to control inflation the best way is to increase interest rates. But thats a story for another day.

 

So in a nutshell if you fell good Ol Mervyn is going to increAse or at least keep rates constant in the UK then you will have a strengthing or at worst stable pound.

 

Exactly the same with the EURO

 

Should he decrease then expect further weakness of the Pound. Again does HE want to fight inflation housing problems etc or stimulate growth in your economy.

 

 

 

Just my 50p

 

Shaun

[AZZZEY68 0]

Bangkok bank do a good rate on large deposits i believe ?

[shauna 114]

To add one extra thing take your time over the transfer. What I mean by that is if you dont need the 50k asap then stay where you are. Alternitavely you can "trickle " it in in little batches of say 5K at a time of a period of time, that way you are spreading the risk of currency fluctuations go either way.

 

 

To add one extra thing take your time over the transfer. What I mean by that is if you dont need the 50k asap then stay where you are. Alternitavely you can "trickle " it in in little batches of say 5K at a time of a period of time, that way you are spreading the risk of currency fluctuations go either way.

[Eneukman 1]

I would like to know the answer to this question as well. Fortunately, I don't have to bring any funds into Thailand for several months so I can afford to sit back and wait.

 

As for the predicted strengthening of the dollar suggested by hound, IF this does happen, the dollar should strengthen against ALL currencies. It should not have a major effect on sterling or the euro - baht exchange rates other than possibly increasing optimism in the European markets.

 

Alan

[cannonball83204 78]

Here is a graph that tells how the dollar has been doing against the baht.

 

http://finance.yahoo.com/currency/convert?...;submit=Convert

 

It seems to be strengthening a bit for the last few days. It is now at 31.715/$1 USD.

 

It can only get better as far as I am concerned, but I am the eternal optimist, so make your own judgement.

 

Reggie

[shauna 114]

Trust me its going to get worse. Interest rates have already dropped 3% Benanke is looking at another .25%

 

I hope I am wrong.

[Owen` 2]

I have no predictions.

 

There are some new investment vehicles out, however, that you folks can use to insure whatever decision or timing you choose with moving money from one currency to another.

 

http://www.etftrends.com/currency/index.html

[joekicker 53]

There are some new investment vehicles out, however, that you folks can use to insure whatever decision or timing you choose with moving money from one currency to another.

 

http://www.etftrends.com/currency/index.html

 

Owen, do you think those funds might charge you a tad for the insurance?

[Owen` 2]

There are some new investment vehicles out, however, that you folks can use to insure whatever decision or timing you choose with moving money from one currency to another.

 

http://www.etftrends.com/currency/index.html

 

Owen, do you think those funds might charge you a tad for the insurance?

 

 

Perhaps bad phrasing on my part. "Portfolio insurance" is a phrase that was invented back in the late 80's. It's mostly "derivatives". Meaning call or put options. If you owned some shares of some company and you

were afraid it would go down in some time period, you could buy put options, while still holding the shares. Put options increase in value if the underlying stock decreases in value. So by buying put options you were "taking out insurance" on the stock itself. You held the stock, which decreased in value, but your put options increased and if you calculated how many puts you bought properly, the entire event would be a non event. You lose no money . . . you "insured" the value of the stock.

 

These ETFs carry an annual expense ratio of 0.4% (for FXB, as an example). That, plus the commissions on the trade, is what they "charge you for the insurance". This is quite low as funds go. A commodity ETF like DJP charges 0.75%. For the case of FXB, priced in dollars and reflecting the UK pound wrt to the dollar, it goes up if the pound goes up. Similarly FXE does the same for Euros. FXA is the ETF for the Australian dollar wrt US dollar.

 

So let me see if I can construct an example. You are preparing to move some US dollars to Thai baht. You are going to get XXX exchange rate when you do. You have a lot more money in your US bank that eventually will need to move to Thailand, but you're not comfortable with the risks of bank corruption or politics resulting in some kind of confiscation or some other fear and so you just don't want to move it all to Thailand now. BUT. You also are bothered that the exchange rate is eroding and may continue to do so. Well, there is no USD/Thai Baht ETF currently being traded, but there is a USD/Chinese Yuan ETF and if you decide that the USD erodes vs the Yuan similarly to its erosion vs the Baht, then (I do not claim this is so) this ETF is insurance. You "insure" the baht (yuan) value of the money in the US bank. You buy the USD/Chinese ETF and it will go up if the dollar declines vs the Yuan.

 

FYI guys, as of now the USD has declined by about 3% vs the Thai Baht since April 2007. There's been a lot of volatility, but the decline is 3% Y-Y. The UK pound over that same period has declined 4%.

Edited April 29, 2008 by Owen`

[joekicker 53]

Owen I understand the hedging part (not hedge funds, just small-haitch hedging). You can lock in your money (or goods) at a certain rate, fair enough.

 

But I'm saying these guys don't "insure" you for free, eh? You may not lose any "money" but there is that little handling fee or whatever they're calling it this week, that they take off the top like any other casino where you place a bet.

 

This is apart from still losing money if the rate/goods go the other way in value of course. That's why it's quite a bit like a casino, because you may be WORRIED the exchange rate is eroding but in fact in three months it doesn't erode at all but gains.

 

This just gets us right back to the OP who demands to be told whether the baht and pound will go up or down. Well, heck, we all want to know that, why do you think I work late every night on my time machine?

[torrenova 644]

Without going into too much technical detail I ask this simple question:

 

How long have you guys been coming to LOS and where are you from ?

 

I'll hazard a guess that a minimum of 90% have not been coming here since before the 1997 Asian financial crisis. Thus, all the majority of people know are artificially high average fx rates. Of course, the Euro didn't even exist then so our Euro cousins were pre occupied with getting ripped off as they changed Deutschmarks and Franks into Euros.

 

Roughly speaking, the USD was pegged at about 25 baht to one dollar, the pound rate was floating but as it was about 1.6 USD it meant a rate around 40 baht to the pound.

 

During the crisis the £ hit 90+ and the $ was 50+ Even after some calming down the £ "average" was just below 60 and then just over 60 and 60 became a good benchmark for a very good fx rate. The $ followed along similar lines.

 

Roll forward a few years and we had $ rtes over 44 and £ rates in the high 70's. For people coming at ths time their lower resistance levels were placed artificially high and when the $ fell below 40 they were shocked and as it headed towards 30 I think some were suicidal. £ holders had a similar but less bumpy ride but it is still over 60 as I write today.

 

So the doom mongerers are largely the newcomers who believe they have some "right" to USD 40 and GBP 70. Add in oil inflation, real Thailand inflation, lower income growth back home due to low inflation and crap fx rates and its no wonder they are worried shitless.

 

I pity the badly advised guys who retired here on an income which was fair at best based upon 40+ to the $ and now find themselves below the retirement threshold. With spiralling costs and an ever decreasing income life must be very stressfull.

 

As to where we go from here then go look up forward rates. There you will find the best guestimate of where the professionals think fx rates will be in X number of years. You can then run standard deviations against the data and various simulations if you are that way inclined or you could just lick your finger and see which way the wind is blowing.

 

But face some facts. The $ is fucked, permanently. Long live the Euro. Sorry but the days of the $ as the world currency are numbered. Flick oil into euros and watch the US collapse.

 

The £ is better off than the $ but you are not going to see 70+ anytime soon and I bet that 60 will look attractive in not too long a while. Previous comments about cross currency interest rates and hot money are part of the equasion I agree but the fundamentals are far more important in the longer term.

 

Another reason why people are complaining is that they have been bloody stupid in the past. When fx rates were artificially high they were on a spending spree giving out way OTT money to girls and introducing the concept of tipping (cheers yanks). Now the girls don't give a fuck about fx rates but they now want increased cash and it is hurting the guys.

 

Yet still there are idiots paying Bt1000 barfines and paying hookers upfront 2.5/3k for LT which the bitch turns into ST and they just shrug their shoulders and say "TIT". These are the same morons who complain that a beer is Bt5 too much in one place over another.

 

Wake up and smell the coffee guys !

 

I wouldn't bank on a USD rate over 25 and a GBP rate over 50 for any medium term financial planning. Of course I hope I am wrong and Thailand could yet fuck up again and shoot itself in the foot.

 

The next big thing will be when HM the K ides and I would not want to be here for that. In fact, I won't be. All hell will break loose and it could drive Thailand back to the dark ages or it could be the catalyst to spark Thailand into action and if so, you can kiss good fx rates goodbye.

[shauna 114]

Very well put. Couldn't agree with you more.

 

Key thing above all else is that its not a case of the BHat strengthening but more the USD weakening. Gone are the days when the US sneezed the global economies caught a cold. The world is now ignoring the US in an economic sense and focusing on Indian AND Chinese consumption.

 

However WATCH this space when all the Chinese production collapses because their number one market the USa is dead.

 

Then there will be LOTS of cheap Thai pussy for all and sundry.

[js007 795]

It's funny, but just yesterday I was reading an article by a guy who was of the opinion that the Euro was just another fiat currency, like the dollar, and that the economic fundamentals behind the Euro were just as bad, or worse, than the economic fundamentals supporting the dollar. In other words, don't invest a dime in Euros unless you want to lose your money.

 

Where that leaves everyone, I'm not sure. The Chinese Yuan? Singapore dollars? Thai Baht? Japanese Yen?

 

J

[Owen` 2]

Owen I understand the hedging part (not hedge funds, just small-haitch hedging). You can lock in your money (or goods) at a certain rate, fair enough.

 

But I'm saying these guys don't "insure" you for free, eh? You may not lose any "money" but there is that little handling fee or whatever they're calling it this week, that they take off the top like any other casino where you place a bet.

 

This is apart from still losing money if the rate/goods go the other way in value of course. That's why it's quite a bit like a casino, because you may be WORRIED the exchange rate is eroding but in fact in three months it doesn't erode at all but gains.

 

This just gets us right back to the OP who demands to be told whether the baht and pound will go up or down. Well, heck, we all want to know that, why do you think I work late every night on my time machine?

 

 

Joe, yes, there are "casino costs". I laid them out. They are 0.4% (annual) charged by the sponsoring outfit that runs the index and manages the ETF. It's like a mutual fund. The fund company, like Fidelity or TRowe Price, charges a fee to manage the fund -- buying and selling stocks within it to maintain some mixture they have declared sacred. A typical managed mutual fund will charge about 1% for that service, annually. You will never see it come out of your account. The price of the fund itself is adjusted.

 

Additionally, these ETF things are bought and sold like shares of stocks, so whatever brokerage you're using will charge you the usual broker commission fee. A typical number for this is $7 for 1000 shares. Buy 1000 shares of anything and pay $7. If the price was 35, that's $7 out of $35,000 (or 0.02%, a very tiny cost).

 

And yes, everyone wants a crystal ball. No one has one that is accurate all the time. It's because of this that obsessing over costs (the 0.4% and the $7) makes sense and defines this as a valid place to devote attention because it is the only thing over which you have 1) control and 2) an accurate crystal ball.

 

Torrenova has always had good stuff to say and it's clearly based in experience. These currency ETF products are very new -- I think only invented months or a year or so ago -- but they do NOT erase experience. They are a convenience tool. They make it easier and cheaper to implement your own decision/judgment of what is going to happen next -- not that you should try.

[hybrid 1]

Without going into too much technical detail I ask this simple question:

-snip-

 

a very in depth and thought out reply.. many thanks

[scorpions 6]

Why you don't use simply commercial foreign exchange specialist like firms do?

 

hifx foreign transfer

 

or

 

moneycorp foreign transfer

 

There service is now also available for individuals. The service is free of commission and transfer fee and you won't get a better exchange rate anywhere. On top you can secure the best available rate for up to 2 years in ahead in my case 50.2341 bath for 1 euro. From my POV the best solution for regular payments or for an acquisition as you can still collect interest in your home country (LOS=0%) and keep it as long as possible in a "safe nest egg place".

 

http://moneycorp.com/personal/payments/

 

 

Example:

A friend of mine is working in the UAE and needs to pay his ex-wife in South Africa a monthly "fee" in Rand with all the fluctuation of the $ linked to the Dirahm he was lost. Now he have a clear payment schedule and he is saving a significant amount of money (transfer fee, exchange rate, fixed amount etc.). It's straight forward and simple to settle up. You might have a look and yes the $ starts to bounce back as the people start to see the light at the end of the tunnel. After the internet bubble we are experiencing now the real estate bubble what will be the next one in the U.S.?

 

P.S.

No I'm not linked to this services besides that I'm using them ...

Edited May 4, 2008 by scorpions

[hybrid 1]

Why you don't use simply commercial foreign exchange specialist like firms do?

 

hifx foreign transfer

 

or

 

moneycorp foreign transfer

 

There service is now also available for individuals. The service is free of commission and transfer fee and you won't get a better exchange rate anywhere. On top you can secure the best available rate for up to 2 years in ahead in my case 50.2341 bath for 1 euro. From my POV the best solution for regular payments or for an acquisition as you can still collect interest in your home country (LOS=0%) and keep it as long as possible in a "safe nest egg place".

 

http://moneycorp.com/personal/payments/

Example:

A friend of mine is working in the UAE and needs to pay his ex-wife in South Africa a monthly "fee" in Rand with all the fluctuation of the $ linked to the Dirahm he was lost. Now he have a clear payment schedule and he is saving a significant amount of money (transfer fee, exchange rate, fixed amount etc.). It's straight forward and simple to settle up. You might have a look and yes the $ starts to bounce back as the people start to see the light at the end of the tunnel. After the internet bubble we are experiencing now the real estate bubble what will be the next one in the U.S.?

 

P.S.

No I'm not linked to this services besides that I'm using them ...

 

i asked moneycorp for a quote sometime ago..

they were only offering 57bht/£ when the rate was 69bht/£ in thailand

 

 

..

 

i read this earlier today.

do things like this make the baht weaker or stronger against the £ & $ or no difference

 

Thaiiland suffers Bt157 billion deficit in first half of Fiscal 2008

 

BANGKOK, May 4 (TNA) – The Thai government suffered a deficit of Bt156.87 billion during the first half of the 2008 fiscal year, which began on October 1, up about Bt75.6 billion from the corresponding period of Fiscal 2007,a Finance Ministry spokesman said.

 

Somchai Sajjapong, who advises the Ministry's Fiscal Policy Office, said the government in first half of Fiscal 2008 suffered a deficit of Bt164.04 billion, while the government's local administrative organisation enjoyed a finance surplus of Bt7.17 billion, meaning the government was in deficit of Bt156.87 billion.

 

Meanwhile, the government suffered a budget deficit totaling about Bt159.55 billion during the same period, representing 1.7 per cent of gross domestic product, said Mr. Somchai.

 

Revenue earned by the government during the period totaled Bt657.21 billion, up 7.6 per cent from the corresponding period of the previous fiscal year. Its expenses amounted Bt816.76 billion, an increase of 14.4 per cent from one year ago, Mr. Somchai said.

 

Payment to overseas on project loans and structural adjustment loans during the first half of Fiscal 2008 totaled Bt285 million, down sharply by 56.7 per cent, he said. (TNA)-E111

[Eneukman 1]

I'm not an economist, but you cannot take one country's budget deficit on its own (unless the country is suffering from rampant administation and general maladministration as in Zimbabwe). Many different factors affect exchange rates - is the economy growing or sinking, level of interest rates, what is happening re inflation, balance of payments etc etc.

 

The UK's budget deficit is predicted to be somewhere between 2.9% Alastair ("Arse Licker") Darling's figure and 3.3%, the EU's prediction. If the EU is correct, the UK will have exceeded the EU's guideline figure of 3% The UK's economy is still growing though at a modest rate of 1.7%

 

http://www.telegraph.co.uk/money/main.jhtm.../29/cneu129.xml

 

On these figures, Thailand's budget deficit doesn't appear to be too bad.

 

Alan

[Owen` 2]

A bit of economic musing, per Eneuckman's comment.

 

Budget deficits and "government debt" have associated with them a somewhat insidious aspect of camouflage, namely, they can pay themselves off.

 

Meaning, a country can run a budget deficit forever and see the value of its debt decline.

 

How? Inflation.

 

If a country has XXXXX of debt at an average interest rate of YYY% that generates ZZZ of interest costs, all that needs to happen is have the country's government pay 98% of ZZZ in each year's budget, which can be still in deficit, and the annual 3-4% inflation will erode the value of XXXXX.

 

Too many letters. If you have 10 trillion dollars of debt and inflation runs 4%, that's 400 billion in value erased from that debt without anyone paying a penny on it. Of course, the 10 trillion is accumulating interest and probably beyond the 400 billion in inflationary dilution, but if the government pays a portion of that interest and gets the number down to < 400 billion, then a "deficit" will still show in the accounting, but the actual debt is shrinking in a real way.

 

Gasoline/petrol is in the process of doing this to all debt worldwide right now. Borrowers are paying back the dollars they borrowed with less valuable dollars.

 

So in general, sky is falling media stories about deficits and debt can safely be ignored. Debt pays itself off if you simply service the interest below inflation's erosion.

[sinbinjack 244]

I can only sat that the ex rare is now almost a full baht more per pound since I came to LOS on the 23rd of april.The ex rate is ( I just found out, Do I feel stupid)different in different banks and can be as much as a quarter of a baht more in banks in ther same soi. It pays to shop around as even on a modest ammount of pounds yo can get a little more baht for your money

[Gonzo 419]

As an Aussie I am not complaining. We have been getting a very good exchange rate for quite a long time. A country rich in minerals for export to China and India at present = more Thai Baht.