Market Highlight 04.07.2024

The USD Index at one point fell 0,6% to nearly 105 points yesterday after a series of weaker-than-expected U.S. economic data were released. Data showed that private-sector payrolls in the U.S. grew less than anticipated in June and initial jobless claims increased, both indicating a slowdown in the labor market. Meanwhile, the U.S. service sector activity also contracted last month as the PMI fell below 50 points for the second time this year. Factory orders also fell by 0,5% in May, much lower than previous forecasts. Overall, last night's U.S. economic data continued to signal that the world's largest economy is slowing down, thereby increasing the prospects for an early rate cut from the FED and weakening the USD.

However, the minutes of the FED's June policy meeting released early this morning provided necessary support for the greenback, helping the USD Index recover to 105,3 points. Some members of the FED's policy committee remained cautious about any potential rate cuts and did not rule out the possibility of further rate hikes if inflation shows signs of rising again. The consensus is that the U.S. economy is slowing down, so monetary policy needs to be ready to respond to any unexpected situations in the coming period. The minutes indicated that a rate cut at the end of July is unlikely, but this meeting could lay the groundwork for the FED's first rate cut in September (74% probability).

The USD/VND interbank exchange rate was not fluctuate significantly yesterday and continued to be traded around 25.450. The foreign currency demand at the beginning of the month helped balance the exchange rate at the current level amid the pressure of a weakening USD in the global market.

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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