Market Highlight 18.12.2025

Business activity across the United States, Europe and parts of Asia continued to expand as 2025 draws to a close, albeit at a slower pace amid rising tariff barriers and heightened uncertainty in trade relations among major economies. The U.S composite PMI - based on survey responses from around 1.000 manufacturers and service providers - eased to 53  from 54,2, marking a six-month low. According to S&P Global, U.S businesses are increasingly feeling the impact of higher costs stemming from tariffs imposed by President Donald Trump. The index tracking input costs rose at the fastest pace since November 2022. Tariff-driven price increases, initially concentrated in manufacturing, are now spreading into the services sector, weighing on corporate affordability and investment capacity in the U.S economy. Comparable data released on Tuesday also pointed to a slowdown across Europe, Japan, India and Australia. The euro area composite PMI slipped to 51,9 in December from 52,8 a month earlier, with weaker performance largely driven by a downturn in Germany’s manufacturing sector.

The USD Index edged up by nearly 0,2% yesterday ahead of policy meetings by the European Central Bank and the Bank of Japan later this week. Markets will closely watch the U.S CPI report due on Thursday evening for signals on the Federal Reserve’s policy stance in January, as expectations point to the U.S policy rate being kept unchanged until March 2026 - a trajectory that may run counter to President Donald Trump’s preferences.

Domestically, the USD/VND exchange rate closed yesterday at 26.335, trading within a daily range of 26.330 - 26.360. As supportive factors for further upside in the exchange rate have weakened, expectations are building that the downward trend will persist, with the pair likely to move below the 26.300 level.

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