The Thai baht has been a runaway success among Asian currencies this year — surging more than 6 percent while the US-China trade dispute has punished peers such as the South Korean won and Chinese yuan. There are two reasons it could rise even more.
The Thai currency has proven to be the preferred Asian hedge against global trade frictions, sheltered by the country’s current-account surplus and record foreign reserves.
The baht shrugged off the last three spikes in US-China tensions, and has shown to be the second least responsive to shock yuan moves among eight Asian currencies, a Bloomberg study found.
While US-China trade sentiment has recently appeared to improve, a stiff test is approaching with high-level talks due to start in Washington early next month.
Given that expectations are now relatively optimistic, there appears to be increasing scope for disappointment — all the more so as US President Donald Trump is notoriously hard to predict. Any setback should pave the way for the baht to outperform.
A second reason for possible baht strength is much closer to home.
The Bank of Thailand is to review policy on Wednesday, a month after cutting interest rates for the first time in four years.
The 25 basis-point reduction on Aug. 7 caught economists by surprise, but had already been priced into currency forwards.
This time around, the six-month implied rate on baht forwards is just nine basis points below the 1.5 percent policy rate, compared with 56 basis points before the August meeting, implying that further easing is much less likely.
Most economists surveyed by Bloomberg also expect the Bank of Thailand to stand pat.
Although the central bank has said it is worried about baht strength, these concerns might have been alleviated last week by the more hawkish-than-expected stance taken by the US Federal Reserve on Wednesday to prop up the US dollar.
At the same time, a buildup in Thai household debt could give policymakers an additional reason to stay on hold.
The Thai authorities have taken a number of steps in the past few months to try and restrain the baht, including reducing the supply of short-term bonds to discourage fund inflows and cutting the limit on outstanding non-resident baht accounts. These have had little effect so far, and there are no signs they will have any more success in the near future.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the