Market Highlight 06.09.2024

   The USD Index edged down by slightly over 0,1% yesterday as hiring slowed among U.S businesses last week, while the services sector continued to show stability in August. An ADP report revealed that private companies are hiring fewer positions than at any time since 2021, with only 99.000 jobs added last month compared to 111.000 in July. U.S businesses are striving to minimize layoffs and gradually scale back hiring as they grapple with high costs and interest rates. The August private payroll data provided clearer signals that hiring demand in the world’s largest economy is cooling, thereby easing inflationary pressures. The market currently expects about a 40% chance that the Federal Reserve will cut interest rates by 0,5% at its meeting in two weeks, with total cuts for the second half of this year potentially reaching 1%. The U.S. nonfarm payroll report, due tomorrow evening, could cause significant volatility in the currency market if there are more surprises, similar to those in the July report. The USD has now declined by approximately 5% from its 2024 peak and is hovering at its lowest level in nearly a year following a sharp adjustment last month.
  The USD/VND exchange rate recorded a sharp decline of more than 100 dongs yesterday, closing at 24.745. Selling pressure dominated most of the day despite some foreign currency purchases for overseas payments being recorded. Additionally, the domestic exchange rate’s downward trend was supported by market sentiment aligned with the strong recovery of Asian currencies during the day, particularly the CNY, which rose nearly 0,3%. The failure to maintain the 24.800 support level opens up the possibility of further weakness in the domestic exchange rate, with the potential of targeting the 24.600 - 24.700 range in the short term if U.S employment data tonight falls below expectations.

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