Market Highlight 02.07.2024

The USD extended its gains to the highest level in 38 years against the JPY (161,7) due to the continued sharp rise in long-term U.S government bond yields and data showing that Japan's economy in Q1 contracted more than previously announced. The JPY has lost an additional 12% in value since the beginning of the year that falling to its lowest level since 1986 along with the next target forecasted to reach 170 points if there is no further intervention from the Japanese government. The Bank of Japan's slow pace in raising interest rates is creating a significant disparity with U.S interest rates. However, weaker economic growth now provides the BOJ with fewer reasons to raise rates. Previously, the BOJ had consistently signaled that it might raise interest rates in its meeting at the end of July to support its currency.

According to the General Statistics Office, in the first six months of 2024, Vietnam's trade turnover reached over 368 Billion USD that indicated an increase of nearly 16% compared to the same period last year. Exports are estimated at over 190 Billion USD, a record high which up more than 14% year-on-year. The U.S is Vietnam's largest export market with an estimated turnover of 54,3 Billion USD. China is Vietnam's largest import market with an estimated turnover of 67 Billion USD. Notably, exports of computers, phones, and components reached over 60 Billion USD; electronics, computers, and components achieved the highest growth rate with nearly 33 Billion USD in its value.

The USD/VND interbank exchange rate rebounded by nearly 10 Dong, continuing to stay around 25.450 on the first working day of July after declining in the previous two days. The demand for foreign currency by domestic corporates at the beginning of the month remains quite high that combined with the current strength of the USD globally, maintaining the exchange rate around the SBV's USD selling price of 25.450 and continuing a trend that has lasted for more than two months.

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Directly contact us to receive market news and consultancy on foreign exchange products and derivatives:

- Financial Markets Division – Email: ktttc@acb.com.vn ; or

- Mr. Khanh Hoang (Financial Markets Senior Analyst) – Email: hoangnk@acb.com.vn