The Pound Sterling declined versus the majority of its most traded currency rivals on Monday after Bank of England (BoE) Chief Economist Andy Haldane made dovish comments. Haldane suggested that a benchmark rate increase was just as likely as a cut, and the policymakers should avoid an early hike with major economies still scarred from the most recent recession. ‘We are in no rush to raise rates, the recovery is taking hold nicely, the last thing we want to do is knock the stuffing out of that,’ said Mr Haldane.
However, the Pound managed to recover some of its losses after domestic data printed positively. GfK Consumer Confidence bettered the median market forecast of a rise from 1 to 2 in June, with the actual result accelerating to 7. The advance in consumer confidence has been linked to the post election boom and the combination of accelerated wage growth and ultra-low interest rates. The Pound is still hovering in a weak position against many of its peers, however, with the Haldane comments weighing on investor confidence. It is fair to say, however, that most BoE policymakers disagree with Haldane. Indeed, the last time he made similar comments Governor Mark Carney dismissed them.
The Pound Sterling to Thai Baht (GBP/TRY) is currently trending in the region of 52.9950.
The Thai Baht declined versus many of its major rivals after May’s Industrial Production saw an annual declination of -7.6%; well beyond the median market forecast -4.07%. In May, economic recovery ‘continued to be slow and fragile,’ the Bank of Thailand (BOT) said, adding that merchandise exports ’remained sluggish and private spending softened.’
May’s slump in exports, which equate to around 60% of the Thai economy, was the fifth consecutive month of declination. Many businesses are holding off investment or expansion amid uncertainty regarding Exports to Europe, its main market. With geopolitical upheaval in Europe showing little sign of immediate recovery, exports are likely to continue to fall. ‘We have delayed our production and investments because the current production line is not running at full capacity. This had delayed our decision to hire more workers,’ stated Wattanapong Sirivadhanahul, senior vice president at S P Ceramic Collection Ltd.
The Thai Baht depreciation was somewhat slowed, however, after May’s Current Account increased from $1110 million to $2127 million despite predictions of a drop to $671.1 million.
The Pound Sterling to Thai Baht (GBP/THB) Exchange Rate was trending within the range of 52.9150 – 53.2160.