Market Highlight 04.11.2025

The manufacturing activity index across Asia highlights a divergence among major exporting economies, as U.S tariffs continue to disrupt supply chains, though overall figures still point to a regional slowdown in factory output. The S&P Global Manufacturing PMI for October showed that producers in key export powerhouses such as South Korea and Taiwan reported weakening demand, while Southeast Asian economies like Vietnam and Thailand recorded an increase in new orders. According to S&P Global, business confidence in Vietnam rose to its highest level in 16 months, underpinned by optimism that new orders will continue to expand, alongside plans to increase production capacity. The growth in new orders accelerated to its fastest pace since July 2024, supported by improving customer demand. The report also noted that actual U.S tariff rates on goods from major Southeast Asian economies remain lower than those applied to Chinese exports - a factor that is expected to support regional exporters in 2026.

The USD climbed to a three-month high against the euro on Monday, extending last week’s gains, as markets scaled back expectations for another Federal Reserve rate cut this year. Chicago FED President Austan Goolsbee said Monday evening that he was concerned about further rate cuts while inflation remains well above the Central Bank’s 2% target and is expected to accelerate through the remainder of 2025.

The interbank USD/VND exchange rate closed at 26.315 yesterday, with an intra-day low of 26.290. Current market conditions continue to favor a downward bias in the exchange rate, with the expected trading range projected to hover around 26.300 during today’s session.

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