Market Highlight 12.06.2025

   U.S inflation remained under control in May, alleviating concerns that President Donald Trump’s tariff policies would lead to rising consumer prices. The Consumer Price Index (CPI) rose by 0,1% month-over-month, undershooting earlier forecasts. On a year-over-year basis, inflation increased by 2,4%, hovering near the four-year low recorded in April. In recent months, American businesses have warned that they may be forced to raise prices in response to higher import tariffs imposed by the government. Many anticipated that the impact of these tariffs - particularly on goods such as automobiles and clothing - would be reflected in the May CPI figures. However, demand has proven insufficiently strong for firms to pass on higher costs to consumers, making tariffs less inflationary than initially feared. Another contributing factor is that many companies stockpiled inventories ahead of the tariff implementation, enabling distributors to delay pricing decisions until later this year, when they can better assess consumer tolerance for price increases. The U.S administration has argued that the overall inflationary effect of tariffs would be more limited than economists projected, partly due to the significant decline in energy prices earlier this year. Shortly before the CPI report was released, President Trump announced a successful round of negotiations with China to preserve trade agreements reached in May.
  The USD Index fell by 0,47% yesterday after inflation data showed weaker-than-expected price gains in the world’s largest economy, increasing market expectations of further interest rate cuts by the Federal Reserve. Domestically, the USD/VND exchange rate remained well supported around the 26.000 level, rebounding approximately 30 VND during the day to close at 26.035. The pace of foreign currency inflows into the market may begin to slow following the early-month surge, allowing the exchange rate to stabilize around 26.050 in the coming days, pending clearer signals from the upcoming round of Vietnam - U.S trade negotiations.

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