There may soon be even more pressure on the Thai government to push for a speedier vaccine drive. So far, the government of Prayut Chan ocha, by the Prime Minister’s own admission, has proceeded carefully with caution as its watchword. It comes as money market managers in centres such as London and Dublin are suddenly looking to find out more about herd immunity and medical facts related to vaccine technology as much as they are studying economic data as the vaccine drives in both the United States and the United Kingdom have begun to hold out hope of light at the end of the tunnel for economic recovery across the world.
The US dollar has begun to strengthen in the last week against the baht and the outlook may well be for this trend to continue as the Thai currency has also begun to lose ground against the pound sterling. The reason is the growing impact of the vaccination drives in the United States and the United Kingdom which are also beginning to get the attention of the money markets.
This week, in Bangkok, a key market strategist with Krungthai Bank was forecasting a narrow range of gain for the dollar to ฿30.15 against the Thai currency as he speculated that investors would be studying the latest US employment data and other economic intelligence before betting on future currency directions.
It comes as the Bank of Thailand has made it clear, in recent months, that the movement of the baht is tied to external forces more than government policy or economic fundamentals for the kingdom at this time.
Investors and market analysts are looking at medical data and vaccine activity in the UK and the US
However, there is a change sweeping through the market in the last week as speculators and analysts look closely at what is happening not on the money exchanges and bourses but in improvised clinics and medical facilities across the world especially in the United States and the United Kingdom where vaccination drives are pressing ahead.
Both the United States and the United Kingdom reported drops in infections since January 8th last
The US dollar has strengthened against the baht in the last week and the trend may continue as expectations for an economic recovery rise in the United States due to a lowering of the infection rate for the country since January 8th.
On that date, the United States recorded 308,309 cases whereas as of February 4th it had fallen steadily to 121,627.
Campaigns powering ahead in both countries
Many health experts are suggesting the reason is the US vaccination campaign which latest figures suggest has seen vaccines given to over 8.3% of the population since the rollout began on December 8th powered by a scaled up logistical operation implemented by the US Army.
A similar story is emerging in the United Kingdom where the pound sterling is rallying against the euro and even the US dollar due to the success of the vaccination programme there driven by the government of Boris Johnson.
UK using supermarkets working, on a commercial basis, hand in hand with the military to do the jabs
In the UK, the government has deployed supermarkets working on a commercial basis and the military to get the vaccine out to people in what appears to be a highly successful campaign.
The UK approach stands in stark contrast to Thailand’s cautious approach to a vaccine rollout as outlined by the Prime Minister Prayut Chan ocha and other senior ministers who have signalled that the kingdom would tread carefully so that Thai people were not used as guinea pigs for vaccines developed in record time last year.
The encouraging figures from the western countries were highlighted, this week, by Dr Prasit Watanapa of the Faculty of Medicine, Siriraj Hospital, Mahidol University as he urged the Thai public to more positively embrace a vaccine policy.
Impressive figures from the UK compared to an abysmal performance thus far in the European Union
Starting on the same date, the UK vaccination drive which has reached over 12.57% of the population and is gaining momentum, has seen infection numbers plummet from 68,053 on January 8th to 20,634 on February 4th.
In the meantime, the euro is plummeting as infection numbers rise in the UK’s neighbouring countries of France and Ireland where the vaccination rollout has stalled abysmally.
Money managers are taking notice
The trend has been detected by money managers worldwide who now see a clear link between the ability to vaccinate effectively and economic recovery due to the surprising efficacy of the vaccines.
‘The trend in terms of speed of vaccinations, and then in terms of the infection rates as a follow-through, gives a good insight into who will open up fastest,’ says Charles Diebel, a fund manager in Dublin with responsibility for €4.5 billion.
Many investors are now looking very closely at medical science and the effects of herd immunity than they are to central bank forecasts or assessments of stock values or currencies based on past economic data.
Still no confirmation of causality
Dr Prasit, this week, emphasised that causality has not been established yet the emerging figures look compelling.
On Wednesday the UK reached a figure of 15.8 doses per 100 people compared to 10.7 in the United States and only 3.2 in the European Union.
The emergence of this as a market phenomenon was also acknowledged, this week, by senior analyst Michael Brown of Caston FX in London when he said that a ‘vaccine spread trade is starting to develop’ because of the incoming data.
Baht may continue to weaken until the Thai vaccination campaign gets into gear later this year
For Thailand, it means the prospect of a weakening baht factor until the country’s vaccination campaign gains traction or until the campaigns in other countries allow again the prospect of unhindered foreign tourism to the kingdom to reopen.
The Thai vaccination campaign is due to begin at a critical level in June according to all senior government officials speaking during the week.
We are told there will be smaller numbers of doses administered from the end of this month through to May to frontline medical staff and those most at risk.
Minister of Public Health, Anutin Charnvirakul, described this on Wednesday as testing the distribution network.
On the negative side, it may also mean a hit to medical sector exports which had been picking up while the pandemic raged across western countries.
German media question AstraZeneca jab
Another source of concern may be a curious report in German media during the week where it was reported that health officials in both Germany and Switzerland questioned the efficacy of the AstraZeneca vaccine for over 65s despite being used extensively in the United Kingdom for its successful campaign with other jabs.
Australia also behind the Oxford University product
Australia, like Thailand, is betting big on AstraZeneca’s vaccine developed in association with Oxford University.
Shares down-under took a dive, this week, after the German reports emerged particularly compared to stocks in New Zealand where the government has bet on the US Novamax jab developed as a product of Operation Warp Speed, an initiative of former US President Donald Trump, last year.
Overall, 2021 may be the year of vaccine economics as the value and efficacy of these medical treatments could be the key to restoring normal economic and social life across the world and in Thailand.
Or to put it simply, in a homespun term, health means wealth.