Market Highlight 12.12.2024

The CPI index in the U.S rose to 2,7% in November, highlighting the upcoming challenges for the FED in the fight against inflation. The prices of core consumer goods, excluding food and energy, increased at the fastest rate in 1,5 years, led by the automotive sector, as there was a recorded demand for replacing damaged vehicles due to previous storms. This poses a significant challenge for newly elected President Donald Trump, who had previously promised to curb inflation. Economic experts are concerned that consumer inflation in the U.S could accelerate if the new administration implements widespread tariff increases on imported goods. The CPI data released last night also raises significant questions for the Federal Reserve regarding the pace of interest rate cuts in 2025. The FED is almost certainly expected to cut interest rates by an additional 0,25% at next week’s meeting, marking the third consecutive cut. However, many FED members have recently indicated that the prolonged high inflation could force the agency to slow down the pace of interest rate cuts or even halt them entirely next year.

The USD Index rose nearly 0,3% yesterday, marking the fourth consecutive day of gains following U.S inflation data. The increase in the USD appeared during yesterday morning’s trading session after a report from Reuters indicated that senior leaders in China might consider allowing the CNY to weaken in 2025 as a response to potential tariffs from the D. Trump Administration. The Renminbi traded in the market outside of China has decreased by 0,5% following this information, down to $7,2923. 

Domestically, the USD/VND exchange rate dropped to nearly 25.350 during yesterday morning’s session due to high demand for the Vietnamese dong in the interbank market, before rising back to 25.400 by the end of the day, influenced by the weakening of the CNY. It is forecasted that the exchange rate will continue to trade around 25.350 - 25.400 today.

Asia Commercial Joint Stock Bank assumes no responsibility or liability for any purpose of reference or using the information provided by this newsletter.

Directly contact us to receive market news and consultancy on foreign exchange products and derivatives:

- Financial Markets Division – Email: ktttc@acb.com.vn ; or

- Mr. Khanh Hoang (Financial Markets Senior Analyst) – Email: hoangnk@acb.com.vn