Market Highlight 19.06.2024

Retail sales in the U.S. barely grew in May while revised data from previous months showed lower figures than initially reported, indicating that financial pressures are significantly affecting consumer purchasing power. Specifically, May retail sales increased by only 0,1% after recording a -0,2% decrease in the previous month. The smaller-than-expected increase in May was due to lower gasoline and automobile prices, which impacted revenues at service stations and car dealerships. Along with the growth rate of service consumption slowing in recent months and consumer confidence sharply declining, American households are becoming more cautious amid persistent inflation, a cooling job market and increasing personal financial pressures.

The USD Index fell slightly by nearly 0,1% yesterday after weaker-than-expected U.S. retail sales data increased the likelihood of an earlier interest rate cut from the FED later this year. However, the slowdown in consumption might be what the FED desires, as it could help bring inflation down to the 2% target more easily, especially since domestic consumption plays a crucial role in driving U.S. economic growth. The market's expectations for a rate cut before the FED's September meeting have risen to nearly 70%, up from around 60% last weekend.

The USD/VND interbank exchange rate did not experience significant fluctuations yesterday that mainly hovering around 25.450, although the free market exchange rate continued to rise beyond 25.820. No USD intervention sales were recorded from the SBV yesterday while the ceiling exchange rate remained unchanged at 25.472. With no new dominant factors driving the trend and a fairly balanced supply-demand situation in the current market, the exchange rate is likely to be traded mostly around the SBV's USD selling price this week.

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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