Market Highlight 14.11.2024

The U.S Consumer Price Index (CPI) rose modestly in October, following the slowest growth in 3,5 years observed in the previous month, underscoring the challenges in managing inflation. The U.S Department of Labor reported last night that consumer prices rose by 2,6% year-over-year in October, up from September’s 2,4% increase. While this uptick is not strong enough to alter the likelihood of another Federal Reserve rate cut in December, it does, combined with positive consumer spending growth and a stable labor market, add fuel to potential discussions in the upcoming December 19 meeting. The focus will be on whether to consider slowing the pace of rate cuts in 2025. Prior to the inflation report, markets anticipated about a 60% probability of a FED rate cut next month. Post-report, this probability rose to around 80%.

The USD Index saw its fourth consecutive strong gain, reaching a one-year high of 106,5 level last night as markets speculated that inflation in the U.S could accelerate over the next four-year term under newly elected President D. Trump, potentially narrowing the FED’s policy options. The USD/VND exchange rate remained stable around the 25.350 level yesterday, with an intraday high of 25.365. While the VND continued to be affected by the strengthening USD globally, a significant rise in VND interbank rates played a key role in limiting upward pressure on the exchange rate. The market is expected to trade mostly in the 25.300 - 25.400 range today, with a more pronounced upward trend. However, any potential increase remains capped at the State Bank of Vietnam’s intervention rate of 25.450, as the central bank reiterates its readiness to intervene if the exchange rate shows excessive volatility.

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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

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