The British pound has recently been improving against the Thai baht and is now worth over 44.50. The pound is also at its highest level since June 2022 against the US dollar and is the best performing currency of late in the world’s developed economies.
Investors say the key reason is that the UK economy has held up better than expected in the post-covid era, boosted by the Bank of England’s high interest rates (to tackle inflation) which attract foreign investors looking for good returns for their cash. Other less significant factors are the troubles in the Scottish National Party which have made another independence referendum less likely.
The baht meantime has suffered from war in Ukraine which has pushed up the price of imports, only slightly compensated by a rise in Thai exports. Moreover, Thailand is still battling covid infections and is experiencing delays and controversies in the installation of the new government post-general election. Thailand’s main trading partners China and Japan have also been performing poorly in foreign exchange markets.
The pound’s progress is in stark contrast to predictions after the 2016 Brexit referendum when commentators were predicting a pound-dollar parity within five years. Today, the rate is one pound being worth US$1.28. Some predictions are that the pound may rise to 46 or 47 baht before settling in the latter part of the year.
