Pattaya Foreign Exchange round up
The U.S. Dollar
The U.S. Dollar vs. Thai Baht exchange rate remained relatively steady at the highs.There appears to be a crosswind of the Baht strengthening on international markets, or at least a cessation of the weakening trend of late coupled with recent USD strength. The USD strength is now taking over and the baht is no longer weakening on its own accord. That means a lot of the recent moves in the USD have been soaked up to provide a relatively static Thai baht. The baht moved from 31.1 to 30.75 prior to the dollar strengthening. As the Dollar gained strength the USD THB rate reached 31.30 to end the period at 31.25. Dollar strengthening took place after the Federal Reserve reiterated its stance on pulling monetary stimulus earlier than later. Indeed the Dollar was on a weakening trajectory for several weeks prior to the Fed announcement. Look for stability in the pair to continue in the near term. The DBX Dollar index moved from above 83 to drop to 80.50 only to rebound to 84 after the Fed comments
In another volatile period, the Yen moved from 97 to touch the 100 mark only to fall back to 93 to the USD due to disappointment about further Bank of Japan stimulus. Then as the dollar strengthened the Yen crawled its way back to hit 101.45 before returning to the 100 mark, essentially weakening as a result of the USD bull run. More volatility is expected with the yen likely to remain in the same range namely 93 to 101. For Japanese buyers of Thai property the relatively range bound trading means they can at least see the end in sight for a currency that had weakened from 77 to the USD to 104 in a straight line without any signs of a pull back. Now that there is a two-way market buyers can time their purchases with the best rates on offer. The Japanese stock market has resumed its bull run which is also a good thing for Japanese investor confidence.
The Euro moved to 1.3418 to the USD as part of the broad weakening of the US unit before succumbing to the dollar’s bull run and falling to 1.2765 in just a little over a week, before recovering slightly to finish the period at 1.3028 to the USD. Against the Thai baht the spot rate moved from above 40.5 to be just under the 40 mark with the Thai baht also exhibiting some weakness against all currencies. For those looking to exchange Euros to Thai Baht it means around 38 baht is on offer. The recent stability at near term highs should give confidence to European buyers of Thai property along with a some extra spending power in the Kingdom.
The Australian Dollar
The Australian Dollar remained weak after a significant move in the period, losing its 102.00 handle and then diving dramatically to 0.94 to the US dollar and then going as low as 0.9050, before recovering to 0.9157. Slow China growth and a commodity price collapse have not helped the Aussie as has talk of recession in the country. The entire move marks a 13 per cent drop in little over a month. The period ended with the Aussie fetching 28.7 baht on spot markets, that’s about 27 at kiosks, up from a low of 27.8 on the spot market. The unwinding of the Australian dollar whilst sharp should be seen by many as slowing down and maybe complete allowing Australians to jump into the Thai property market with some stability behind them.
The British Pound
The Pound saw some more gains against the US Dollar at the start of the period moving from 1.55 to 1.57 to the USD before succumbing to the dollar’s strength following Fed commentary. This saw the pound weaken over the course of 10 days to 1.4812 touching a multi month low, before rebounding to 1.5131. Some of the move was accelerated due to weak data from the UK but most was due to the US Dollar moving higher across the board.
Against the Thai baht the pound moved from 47.80 to 47.16 in late period trading, with Thai baht weakness against the US dollar dampening a large part of the move in the international markets. For those holding sterling in cash it means around 45.50 is available at change kiosks as at the end of the period.
With sterling having reached a medium term bottom at 43 to the Thai baht and with the currency bouncing off lows against the USD then there could be room for some slight improvement of rates. With range bound movement already evident it may be prudent to look for relatively small moves in the sterling value.
This is good news for British buyers of Thai property providing them with less volatility in the market.
The Russian Ruble
The Russian Ruble weakened from a 0.97 high to hit 0.92 in the middle of the period only to recover to 0.95. The moves have been largely slow and steady and the overall net effect means the ruble has only lost around 1.8 per cent in value in the last month or so, though it has not been able to take advantage of overall baht weakening against major currencies since it has been in a weakening trend of its own. At 0.95 the currency remains near enough parity to provide stability to the market and to be at a level where Russians will be happy to exchange for both property purchases and for living expenses alike.
The Chinese Yuan
The Chinese Yuan more or less remained static against the US dollar moving from 6.14 to 6.12 then settling at 6.135. It was able to make a more significant move against the Thai baht moving from 4.98 baht to 1 Chinese Yuan and breaking through the 5.00 handle to move up to 5.11 before dropping back to 5.06 at the end of the period. A slightly higher exchange rate will encourage Chinese buyers to buy Thai property and will give them extra spending money to boot.