Market Highlight 12.06.2026

The European Central Bank has delivered its first interest-rate increase in nearly 3 years, becoming the first major Central Bank in the developed world to respond to inflation triggered by the war in Iran. Following its June meeting, the policy rate was raised from 2% to 2,25%, a move that had already been priced in by the market, but which also highlights the challenges facing major economies as energy prices surge due to the prolonged closure of the Strait of Hormuz. Markets are now expecting the ECB to raise rates at least once more this year. ECB President Christine Lagarde said that higher energy prices have begun to spread across the broader economy. Europe has been hit harder than the U.S by the consequences of the Middle East war, as the world’s largest economy continues to benefit from the boom in artificial intelligence investment and a sharp increase in energy exports. The ECB has revised down its growth forecasts for this year and next, to 0,8% in 2026 and 1,2% in 2027, respectively. Meanwhile, the Federal Reserve is expected to keep interest rates unchanged next week at its first meeting under Chair Kevin Warsh, who is facing a difficult choice between President D. Trump’s preference for lower rates and mounting inflation pressure in the U.S.

The USD Index hovered near its highest level in two months after President D. Trump announced that the U.S would launch additional and larger-scale attacks on Iran. Data released on Thursday night showed that U.S producer prices rose more than expected in May, posting the largest increase in three and a half years as a result of the conflict in the Middle East.

Domestically, interbank USD/VND traded mainly in the 26.315 - 26.330 range on Thursday. The effective daily ceiling remained unchanged at 26.410.

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