Market Highlight 08.12.2025

Federal Reserve policymakers are expected to vote in favor of another interest-rate cut this week to safeguard the labor market amid mounting signs of weakness. A December rate reduction would extend the easing cycle that began with policy cuts in September and October. Forecasts indicate that the U.S Central Bank is likely to further loosen monetary conditions with two additional 25-basis-point cuts in 2026, beginning in March. Policymakers remain sharply divided over how to balance the Federal Reserve’s dual mandate of price stability and maximum employment. Several officials have voiced concerns about persistent inflation as higher prices - driven in part by tariff effects - continue to weigh on consumers. Others argue that there is still scope for another rate cut to reinforce labor-market conditions.

The USD Index fell 0,1% on Friday as markets awaited the outcome of the FED’s 10 December meeting, while U.S consumer-sentiment data and the personal consumption expenditures (PCE) inflation gauge came in broadly in line with expectations. This week will see a series of monetary-policy decisions from major Central Banks, including the Reserve Bank of Australia on Tuesday, the Bank of Canada on Wednesday, and the Swiss National Bank on Thursday. The FED’s December meeting will also take place on Wednesday. Following last week’s U.S economic releases, markets have priced in roughly a 90% probability of a 25-basis-point rate cut by the FED early Thursday morning.

The interbank USD/VND exchange rate edged down by roughly VND 10 during Friday’s session, closing at 26.365. The exchange rate showed little movement over the past week even as the USD weakened by about 0,5% globally. The market is expected to continue trading within the 26.320 - 26.380 range this week.

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