Market Highlight 17.05.2024

The USD Index rebounded by approximately 0,2% yesterday after experiencing its largest drop in five months (-0,7%) the day before. U.S economic data released on Thursday showed that import prices rose by 0,9% last month. This significant increase indicates that the battle against inflation remains challenging, raising concerns that the FED might delay its plans to cut interest rates. The FED aims to see consistent improvements in inflation across all sectors, not just isolated areas, to ensure confidence in policy adjustments. This approach is informed by historical lessons of prematurely easing policies without fully controlling inflation. While the CPI data on Wednesday provided positive signals for the FED, policymakers have yet to specify a timeline for rate cuts, although the market anticipates that it could happen as early as September this year.

In 2023, Vietnam’s cross-border trade with China showed significant growth, increasing by 63,9% to reach 42,7 Billion USD but saw declines in trade with Laos (1,57 Billion USD, down 0,63%) and Cambodia (6,14 Billion USD, down 23,7%). Specifically, the total value of goods traded through land border gates between Vietnam and China reached 42,7 Billion USD, up 63,9% from 2022. Exports amounted to 17,2 Billion USD, a dramatic increase of 342,4%, while imports were 25,5 Billion USD, a decrease of 7,3% compared to 2022.

The USD/VND exchange rate slightly decreased early yesterday to nearly 25.400 before recovering and closing at 25.440. Despite the USD weakening by nearly 0,8% globally since the beginning of the week, the domestic exchange rate has remained relatively stable, closely aligned with the intervention rate of 25.450 set by the State Bank of Vietnam. It is anticipated that the exchange rate will resume its upward trend today, driven by strong foreign currency demand while the main supply currently comes from SBV.

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