BANGKOK, Nov 4 (TNA)

 

The Thai baht which has been strengthening over the past two weeks due to continued foreign capital inflows is expected to remain strong next week, according to a report issued by Kasikorn Research Centre.

 

The report said the baht closed at Bt36.67 against the dollar compared to Bt36.87 late last week--which was the highest in more than seven years due in part to an intervention by the Bank of Thailand attempting to put the brake on the strenghtening baht.

 

The baht also became stronger against the dollar this week following continued capital inflows while the dollar weakened following a poor performance of the US economy, it said.

 

The report said the baht is expected to move within the range of Bt36.40-36.80 per dollar next week on continued foreign capital inflows as traders keep a close watch on US employment data for October--which could assist the dollar to become strong, but only on the short-term.

 

Traders are also awaiting US trade figures for September to be released next week and the outcome of the British central bank meeting to be held Wednesday and Thursday in which it might raise interest rate and could pressure on the dollar against key currencies, the report said.

 

Economists have stated that a stronger baht will hurt exporters, whose income will be diluted when dollar income is converted to a lower amount of baht.

 

(TNA)-E011

Yes, the THB continues to strengthen and where will it go long-term is anybody's guess. Old-timers tell me of the days when it was 25 THB/USD.

 

http://research.stlouisfed.org/fred2/series/DEXTHUS?&cid=15

 

My problem is financial planning for my retriement to LOS in about 3 years. What exchange rate to use? For expats already in LOS what exchange rate did they use and have currency fluctuations seriously impacted their life-style? There is that endless debate on Renting Vs Buying but those expats that purchased condos a few years back I would say are in the drivers seat. The costs for the roof over their head is basically fixed.

My problem is financial planning for my retriement to LOS in about 3 years. What exchange rate to use? For expats already in LOS what exchange rate did they use and have currency fluctuations seriously impacted their life-style? There is that endless debate on Renting Vs Buying but those expats that purchased condos a few years back I would say are in the drivers seat. The costs for the roof over their head is basically fixed.

 

It is almost impossible to make an exchange rate recommendation for long-term financial planning. Only two months ago all the predictions were that the baht would move to about 42 to the US dollar and remain there. It didn't exactly work out that way, at least not yet. Then, when the coup occurred, many people thought that would dramatically weaken the baht. It didn't work out that way either. The thing to do is try to be prepared for any eventuality. I would do my financial planning using the current exchange rate because the Bank of Thailand has been intervening to keep the baht from strengthening to the extent that export businesses would be seriously hurt. If the baht returns to the 40's level, wonderful. If not, then at least you're prepared. Whether it will affect your lifestyle depends on your monthly retirement income level and what kind of lifestyle you seek. The question, at present, is whether an exchange rate of around 36 baht to the US dollar can support it based on the monthly income you anticipate.

 

As far as the debate over renting and buying is concerned, that is also a difficult call these days. When I bought, the exchange rate was steady at about 45 to the US dollar. Obviously, if I bought now, I'd be paying a lot more for the same thing. Either way, it is definitely good to know that when something is bought and paid for you at least won't have to worry about that aspect of your life. On the other hand, when you rent you always have the option of simply walking away.

 

Obviously, the exchange rate is something beyond our personal control. The trick is to do your best to be prepared for any eventuality and be very happy if the exchange rate manages to get back into the 40's. We're all trying to deal with the current exchange rate. What will it be a year from now, two years from now, five years from now, ten years from now? There's no way to even guess. What I do know is that old phrase, "sound as a dollar" is now obsolete. Thanks a lot, Mr. Prez.