Market Highlight 19.02.2025

U.S President Donald Trump stated last night that he may impose a 25% tariff on imported automobiles, semiconductors, and pharmaceuticals, with an official announcement expected as early as April 2. The new tariffs on automobiles would have far-reaching impacts on the industry, as approximately 8 million cars and light trucks were imported into the U.S last year, accounting for nearly half of total vehicle sales. European manufacturers, including Volkswagen AG, and Asian companies, such as Hyundai Motor Co., are expected to be among the most affected, given that a large portion of their U.S sales are dependent on imports.

The U.S dollar appreciated against major currencies on Tuesday, led by gains against the euro (+0,36%), as safe-haven demand increased in response to President Trump’s latest tariff statements and stalled peace negotiations over the Ukraine conflict. Market focus now shifts to the release of the Federal Reserve’s January policy meeting minutes tonight, which may indicate policymakers’ concerns over an escalating trade war stemming from the current U.S administration’s trade policies. Markets now anticipate that the Federal Reserve may delay its next rate cut to September or October, later than the previously expected July timeframe, due to signs of resurgent inflation.

The USD/VND exchange rate rose to its intraday high of 25.585 yesterday morning before easing back to 25.525 by the close of trading. News that the State Treasury conducted a USD 150 million auction while foreign currency demand remained high continued to support the exchange rate’s upward momentum. USD/VND is expected to maintain its upward trajectory today, targeting 25.600. Any pullback below 25.500 would present an attractive buying opportunity for USD payment demand in April and May.

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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