Market Highlight 10.06.2024

U.S. job growth exceeded expectations last month, adding 272.000 new jobs in May, even though the unemployment rate rose to 4%. This result is significantly higher than in April and surpasses economists' forecasts of 190.000. Average hourly earnings also increased by 4,1% compared to a year earlier. The increase in hiring by businesses highlights the continued resilience of the U.S. economy despite a mixed picture with manufacturing and consumption slowing due to higher borrowing costs and persistent inflation. Part of the strength in the U.S. labor market might come from an increase in immigrant labor, helping businesses hire more cost-effectively. Following the employment data, the USD Index surged by 0,8% to 104,9 points, marking the strongest daily increase in a month. The market now only expects the FED to implement a 0,25% rate cut once this year either in the November or December meeting. The likelihood of a rate cut in September has decreased to about 50% following the employment report that down from around 70% by the end of Thursday.

The U.S. FED will begin its June policy meeting this week. Signals regarding the number of rate cuts this year will be closely watched by the market participants, given the context of the U.S. economic growth showing many signs of slowing while inflation has not yet fallen to the 2% target. The May inflation report for the U.S. will be released on Wednesday evening this week with expectations that the cooling trend will continue.

The USD/VND interbank exchange rate closed last Friday at 25.400 that recorded a drop of nearly 50 Dongs over the past week, following the weakening of the USD in the global market alongside improved USD supply domestically due to some foreign currency inflows into the market. Cautious sentiment in trading will continue to dominate, keeping the exchange rate around 25.400 this week before the USD trend is more clearly directed by the FED after the June meeting.

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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

- Ms. Hong Anh (Financial Markets Researcher) – Email: anhkh@acb.com.vn