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Thai banking fiasco

  • #1
  • First Post: Dec 19, 2006 8:00pm Dec 19, 2006 8:00pm
Now, folks, this Thai regulatory fiasco is fueling the currency market more than anything. If you haven't heard about it go on Bloomberg or Reuters and read. It's totally a fundamental situation, the ridiculous Thai regulation announced yesterday basically decimated their stock market in a regulatory attempt to devalue their currency. The intended currency devaluation was an attempt to cheapen their exports and discourage speculation.

Thank God I watch this stuff like a hawk, because outside of this information, purely technical, I was short on Cable yesterday. When it happened I reversed and now have 3% on my account in less than 24 hours, minus the drawdown from stopping the shorts.

What happened was the fear of a new Asian bust like back in '97, when it was also fueled through Thailand. There were major safe-haven inflows into European currencies today from Asia, however they were avoiding the USD due to its current weakness. US Econ data should have moved USD stronger today outside of this move, but it's an international market. I hope you all don't trade entirely technically...
"The time to act is when others show signs of tire." --W.D. Gann
  • #2
  • Dec 19, 2006 8:12pm Dec 19, 2006 8:12pm
Can u please link us to some of these articles.
  • #3
  • Dec 19, 2006 8:15pm Dec 19, 2006 8:15pm
Quoting dukeofdents
Now, folks, this Thai regulatory fiasco is fueling the currency market more than anything. If you haven't heard about it go on Bloomberg or Reuters and read. It's totally a fundamental situation, the ridiculous Thai regulation announced yesterday basically decimated their stock market in a regulatory attempt to devalue their currency. The intended currency devaluation was an attempt to cheapen their exports and discourage speculation.

Thank God I watch this stuff like a hawk, because outside of this information, purely technical, I was short on Cable yesterday. When it happened I reversed and now have 3% on my account in less than 24 hours, minus the drawdown from stopping the shorts.

What happened was the fear of a new Asian bust like back in '97, when it was also fueled through Thailand. There were major safe-haven inflows into European currencies today from Asia, however they were avoiding the USD due to its current weakness. US Econ data should have moved USD stronger today outside of this move, but it's an international market. I hope you all don't trade entirely technically...
Some of us might be interested to read this, fundamental notice.

http://www.channelnewsasia.com/stori...248212/1/.html
Right teaching produces right believing leads to right living. - J.P
  • #4
  • Dec 19, 2006 8:16pm Dec 19, 2006 8:16pm
actually duke i saw a good tech trade the evening before the london open off a centerline pitch fork bounce plus 123, just my style of course to each his own, but i find trading technically as long as u follow ur rules is fine by me.. again whatever floats ur boat.
  • #5
  • Dec 19, 2006 8:24pm Dec 19, 2006 8:24pm
hi quick, you think this will move the market when thai opens trading?
Right teaching produces right believing leads to right living. - J.P
  • #6
  • Dec 19, 2006 8:29pm Dec 19, 2006 8:29pm
Quote from channelnewsasia.com:

Finance Minister Pridiyathorn Devakula said that from Wednesday, foreign investment via the Stock Exchange of Thailand (SET) would be exempted from the measures.

"After consulting with brokers, investors and all parties concerned, the Bank of Thailand and Finance Ministry will waive that 30 percent lock-out required for the foreign investment which invests in the Stock Exchange of Thailand," Pridiyathorn said.

"The Bank of Thailand will focus its management of the baht in the debt instrument market. I hope the new measure will restore foreign investor confidence in the Thai stock market and return the stock market to the normal level," he said in a televised statement late Tuesday.

"Starting 8:30 am (0130 GMT) tomorrow, the money that comes into the stock exchange will not be subject to 30 percent reserve," he added.
unquote.

Might want to mark this timing down and see if it can move 10 pips or maybe not.
Right teaching produces right believing leads to right living. - J.P
  • #7
  • Dec 19, 2006 9:13pm Dec 19, 2006 9:13pm
I absolutely will not trade Third-World currencies. I'm not worried about THB. What happened is that THB caused an inflow into EUR and GBP, and I shorted USD based on that fact. People were looking for a safe haven against the Southeast Asian market but didn't want to go to USD because of its current weakness. This whole situation actually moved USD from a long to a short on a technical basis last night. (0100 CST). Thank God I got out of my shorts and into longs quickly, so I'm now very in the black on this move...

I absolutely do not knock technical trading, it's made me $$ before. I think you need to combine the two, however...
"The time to act is when others show signs of tire." --W.D. Gann
  • #8
  • Dec 19, 2006 9:15pm Dec 19, 2006 9:15pm
The Thai government changed this measure as quickly as they implemented it because they saw the effect immediately...
"The time to act is when others show signs of tire." --W.D. Gann
  • #9
  • Dec 19, 2006 10:28pm Dec 19, 2006 10:28pm
So does this mean when China dumps dollars, THB is NOT the safehaven of choice , but rather sterling or euro???

Was this a foreshadowing of what will happen as China [slowly, quietly we hope] sells off dollars?? Sterling and euro will run to highs not seen in years?
  • #10
  • Dec 19, 2006 10:40pm Dec 19, 2006 10:40pm
Quoting MoneyMa$ter
So does this mean when China dumps dollars, THB is NOT the safehaven of choice , but rather sterling or euro???

Was this a foreshadowing of what will happen as China [slowly, quietly we hope] sells off dollars?? Sterling and euro will run to highs not seen in years?

THB was consided a safehaven currency?
  • #11
  • Dec 19, 2006 11:42pm Dec 19, 2006 11:42pm
There was a strong upwards move in the GBP/USD, (and, by extension, GBP/JPY) last night that I couldn't see any justication or explanation for -either technical or fundamental. Perhaps you have supplied the answer to this mystery. Thanks
  • #12
  • Dec 20, 2006 12:06am Dec 20, 2006 12:06am
After the mass escape from the Thai Baht and other asian curriencies yesterday to GBP and Euro, I wonder what could happen today.

Thai markets regained more than 10% and the Baht also recovered a bit in asian session, I'm not suggesting that there will be a backward move of course, but the move we saw yesterday must have lost some of it's momentum and the only thing I can see right now as a Cable mover is the attracktion og the 9850/2010 levels.

Let's see what happens at London open and the act accordingly (like whole of December until now)

Good trading
Klaus
  • #13
  • Dec 20, 2006 12:16am Dec 20, 2006 12:16am
Quoting Crestwind
THB was consided a safehaven currency?
not meant for me to answer but couldn't stand by and watch: .

perhaps when thaksin was the pm, not after the military coup, i guess. (laughs)
Right teaching produces right believing leads to right living. - J.P
  • #14
  • Dec 20, 2006 12:57am Dec 20, 2006 12:57am
I belive most of this move was due to the new Thai regulation put on forien investments valueing over 20,000 i did hear about it on the BBC
@ 6 am EST. so i pulled up the l;ink on the story for ya!

http://news.bbc.co.uk/2/hi/business/6195587.stm
  • #15
  • Dec 20, 2006 1:02am Dec 20, 2006 1:02am
Thx for the info.
  • #16
  • Edited 2:55am Dec 20, 2006 2:45am | Edited 2:55am
Even though the fiasco with the Thai government was put out front as the cause the dollar's decline yesterday, I stumbled across a news article which I think tells the real reason why it fell.

One word: IRAN

http://www.gulf-daily-news.com/Story...&IssueID=29274
  • #17
  • Jan 1, 2007 5:14pm Jan 1, 2007 5:14pm
What do you think, guys? Are the recent events in Thailand (central bank policy, bombings in Bangkok) going to change the long term trend?
I posted some charts and information here http://www.forexfactory.com/forexfor...ad.php?t=11862

It can be a major turning point or just a little period of uncertainty.
  • #18
  • Jan 1, 2007 5:21pm Jan 1, 2007 5:21pm
Quoting stefant
What do you think, guys? Are the recent events in Thailand (central bank policy, bombings in Bangkok) going to change the long term trend?
I posted some charts and information here http://www.forexfactory.com/forexfor...ad.php?t=11862

It can be a major turning point or just a little period of uncertainty.
What effects would you be expecting to see and why?

Personally, I have doubts about just how important the doings in Thailand are to the movements of forex. I can see very transient responses but nothing lasting, at least not on the basis of what has been occurring recently.
  • #19
  • Last Post: Jan 1, 2007 5:23pm Jan 1, 2007 5:23pm
Quoting moonchild
Personally, I have doubts about just how important the doings in Thailand are to the movements of forex.
Thailand is a small country and cannot affect the whole currency market. But their currency, the Baht, is certainly going to be affected.

When I was saying this might be a major turning point I was only reffering to the Baht's upward trend in the last years, not the USD, EUR or any other important currency out there.
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