50 Baht to the Pound

[WorldFun]

nothing to do with pound improving or eur for that matter - everthing to do with USD dropping & with that the baht as linked heavily to dollar like most asian currencies - good news either way

 

question then is - will it stay this way for a while - further improve or usd back up?

[Sakai]

Thanks for the correction worldfun

 

I would say the pound + euro against USD upward trend will continue as long as the markets rally but I fear the rally is too early, or too fast too soon and thus there will be soon a downward trend until further markets recovery.

 

Can be wrong but after all I am not worse or better than many financial gurus and my small person is only playing with ridiculously small amounts in the FX.

 

[HeartThais]

I don't buy the rally yet as we've seen it too many times. I think there's a wave of bank optimism as they believe the worst is behind them. Many banks starting to aggressively pay back government money and raising private capital. Interbank lending is setting fresh lows daily in a sign credit markets are back to normal. But we've seen this before over the last year. In particular, we have seen large bumps in optimism, share prices, risk appetite after every major stimulus only to have it come back down again.

 

But fundamentally, I really doubt this thing turns around until people get optimistic about house prices again. We've hit an inflection point at best but nowhere near a turnaround.

[WorldFun]

right - I'll be sure to enjoy a fx now while rates are up although of course they're welcome to climb higher

[HeartThais]

I've been calling for another meltdown wave triggered by eastern european currency collapse since December but that hasn't materialized. I've been wrong but I stubbornly still think it is a threat. A couple days ago, Latvia failed to raise money at auction. There was a wave of selloffs in baltic currencies because of it. Latvia's currency is pegged to Euro. After failing at auction, the government is insisting they won't have to devalue. They really don't want to devalue because the private sector has a huge chunk of debt denominated in Euros. And they don't have much in the way of foreign reserves. Hmmmm... sounds kinda familiar to me... like 1997 familiar.

 

http://www.ft.com/cms/s/0/aa629880-5068-11de-9530-00144feabdc0.html

 

Well, someone needs to be gloomy.

[WorldFun]

so you're encouraging all latvian currency holders to convert to eur, thb whatever before its too late?

do you really expect many latvian posters on here or others to hold such exotic currency?

 

well sure I hold the odd sek,dkk & sgd but that hardly makes me exotic nor likely to benefit from any 'crash'

[HeartThais]

That's like saying you don't care what happens to the subprime bond market because you don't have any investment in exotic subprime CDOs.

 

Besides the usual suspects, I'm just pointing out what I view as the weakest link today. Who do you think has been lending to these regions? I posted something a while back that was an interactive map of exposure to CEE debt as percentage of GDP and it's scary. Like Asia pre-crisis, currency devaluation in that region could trigger a chain reaction.

[Faustian]

Back down to 54.5 Baht to one Pound, having reached 56 last week. Lots of talk about the Dollar losing strength, again...

[Dexi]

Will we ever get back to the heady days of 70....?Cant see it happening because basically the UK economy is fcuked ...unemployement and huge gvt.debt...ok QE. might get things going a bit but this will be bad for Sterling also..

[WorldFun]

the question now probably is whether mid 50's is the best rate we'll get for years or whether 70 or 70+ will be back or below 50 is where we're heading?