Market Highlight 17.07.2025

   The USD Index fell nearly 0,4% during a highly volatile session last night following reports that President Donald Trump is considering dismissing Federal Reserve Chair Jerome Powell. Markets reacted negatively, as the potential removal of Chairman Powell before the end of his term in May 2026 was seen as a threat to the credibility of the U.S financial system and the dollar’s standing as a safe-haven currency. Key economic data released last night showed that U.S producer prices (PPI) were unexpectedly flat in June. Rising goods prices due to import tariffs were offset by declines in the services sector. Trade-related uncertainty has clouded the economic outlook, prompting U.S consumers to tighten spending, particularly on discretionary items such as leisure travel. The number of foreign tourists visiting the U.S has declined, partly due to ongoing trade tensions and the Trump administration’s tighter immigration policies. With both June PPI and CPI data now released, the core Personal Consumption Expenditures (PCE) price index is projected to have increased 0,3% in June (vs +0,2% in May), equivalent to a year-over-year rise of 2,8% (after 2,7% in May). While the inflationary impact of tariffs may intensify in the coming months, deteriorating business conditions and weakening service-sector activity could offset some of these inflationary pressures.
   Domestically, the USD/VND interbank exchange rate recorded a second consecutive day of gains on Monday, closing at 26.160, in line with the global upward trend in the USD. The daily trading band has remained relatively narrow at around 20 - 30 VND in recent sessions, as the market continues to lack directional catalysts. The exchange rate is expected to ease slightly today, amid a sharp rise in VND interbank interest rates since the beginning of the week.

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