The replacement of the US dollar as the de facto world currency, a prospect raised by some economists, is unlikely to materialise anytime soon because there is no serious alternative on the horizon, says Neil Robbirt, chief executive of the Bangkok-based financial advisory firm Global Investments (Far East) Ltd.

MYSTERIOUS BAHT: Neil Robbirt says no one really knows why the Thai currency is staying strong.

There are several factors strongly supporting the dollar right now. Among them, oil and gold are quoted in the US currency, and China holds massive amounts of US bonds.

To some degree, the dollar's status could be tied to that of the British pound, which Mr Robbirt believes will become history in the medium term.

Although some people think that the Chinese yuan could soar and join the dollar's lofty position, Mr Robbirt says this is unlikely because the yuan is not an internationally traded currency.

"In my opinion, what may well happen over the next few years, depending on what happens in the UK's domestic economy, is the possibility of sterling finally joining the euro, that is to say between the next three to five years.

"Now if that happens and the euro gains more strength, then it's possible that if there is going to be an alternative currency to the US dollar further down the road - we are talking a long time - it could potentially be the euro. It may well be that in 10-plus years that gold or oil will be priced not just in US dollars but it in euros as well."

However, added Mr Robbirt, that day is still in the distant future. Combined euro, yen and sterling holdings across the world today amount to 30%, compared with 70% for the dollar. "The dollar is king, whatever someone wants to say about it, it's a fact, you can like it or not like it but it's the truth.

"So, when you look at these statistics, there isn't an alternative at the present time."

As to why the Thai baht is staying strong, Mr Robbirt says nobody really knows.

"Part of the reason is that they [monetary authorities] have been propping up the Thai baht with their foreign reserves because Thailand has built up quite a large amount of foreign reserves," he said.

"The Bank of Thailand, since the last economic crash in 1997 - once it paid off the IMF - has built up reserves again because there was very significant investment into Thailand from 2000 to 2007."

Thailand's reserves now exceed $130 billion, compared with as low as $20 billion after the July 1997 crash.

"Thailand has very large foreign reserves and it uses them to keep the baht stable. I can't think of another reason."

Mr Robbirt added that from the market perspective,the baht should not be so strong, given last year's GDP contraction of around 3.5%. And while the Stock Exchange of Thailand had a good run over the last four to five months, so did other Asian markets, and this in fact took place despite the economy being weak.

"It's not helping exporters in Thailand, and this is an exporting nation. It's also not helping when people come here for holiday, because sterling has fallen dramatically from 12 months ago. We are sitting at around 53 baht to the pound, whereas just over 12 months ago it was 63."

With the baht being strong and the country carrying on as if it has not been affected by the global economic downturn, Mr Robbirt foresees a very difficult year for Thailand. Although tourism has revived relatively quickly and did quite well during Christmas and New Year, there are still some unknown political issues that have not been resolved.

Some regional countries are starting to do better than Thailand, with Indonesia surprisingly forging ahead.

Last year it posted GDP growth of just over 5%, the most successful performance in Southeast Asia.

"They have a very stable government because the president was re-elected for another five-year term and the majority of the people accept that he has got the country back on track.

"He is dealing with corruption and people are confident about investing in the country because they have stability, and that is a big advantage over somewhere like Thailand at the present time."

Internationally, global investors are currently very bullish about the emerging economies of China, India and Latin America, notably Brazil.

However Mr Robbirt pointed out that in fact India spends massively more than China and Japan, which means that although the Chinese economy is larger and growing quicker, domestically India is doing better than China because of what it is spending in its own country.

"So India is still a good place to be invested in, so is China and so is Latin America with all the oil reserves in Brazil and Venezuela. Plus you have an emerging market following India and China, a massive emerging market.

"So that leaves Europe including the UK, and also Japan and America - they are going to struggle this year. But it's nice to see even the FTSE, the Dow and the Nasdaq are all coming back. If you look at the percentage gains over the last five months in all main indices, they have regained around 70% of their losses, which is not bad when you think about the dire straits we were in at this time last year."

Other good investment areas right now are gold, mining and minerals, plus other commodities and agriculture. Mr Robbirt pointed out that gold soared above the magic $1,000 per ounce level and stayed firm above $1,100 for a while, and although it dipped just before New Year's Day it went up again in the first few days of this year and is currently trading around $1,150.

Investors who seek to stay ahead of inflation should not choose to leave their money in the bank because the interest rates are so low. Rather, said Mr Robbirt, they should examine investment products that are guaranteed by banks.