Market Highlight 02.12.2025

Manufacturing activity in the United States contracted for the ninth consecutive month in November, a decline that businesses largely attributed to President D. Trump’s tariff policies. The manufacturing PMI fell to 48,2, down from 48,7 in October and below the 50-point threshold. The U.S Government has sharply increased tariffs on imported goods since April, a move that in many cases has raised input costs for domestic manufacturers sourcing essential materials from abroad. Uncertainty surrounding retaliatory tariff levels has also weighed on producers as policy shifts increasingly frequently. The outlook for 2026 remains unclear, with an upcoming Supreme Court ruling potentially overturning many existing tariff measures. Facing higher input costs and weakening orders, many U.S firms have delayed hiring. Industries reporting contractions include apparel, textiles, paper products, chemicals, and transportation equipment. The transportation sector in particular has been heavily affected, with tariffs prompting some companies to relocate production overseas rather than reshoring operations to the United States.

The USD Index edged lower yesterday as markets prepared for a pivotal December, which could bring the Federal Reserve’s final rate cut of the year and confirm the appointment of a more dovish successor to Chair Jerome Powell. Markets appear increasingly focused on the FED’s policy trajectory for 2026, with expectations of a rate cut on December 10 now approaching 90%.

The interbank USD/VND exchange rate rose by roughly VND 15 yesterday, closing at 26.370. The market is expected to continue trading within a narrow range around 26.350 during today’s session.

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