Market Highlight 20.03.2025

The U.S Federal Reserve (FED) announced its decision to keep the benchmark interest rate unchanged at 4,25% - 4,5% following its March policy meeting, as it evaluates a series of policy shifts - including trade, immigration, fiscal spending, and tariffs - under President Donald Trump’s administration, which could reshape the economic outlook. U.S consumer sentiment has weakened in recent weeks amid concerns over public-sector job cuts and rising trade tariffs. The latest economic projections show that 11 out of 19 FED policymakers expect at least two rate cuts this year. FED officials unanimously revised their inflation forecast for 2025 upward to 2,7%, from 2,5% in the January projection, with Chairman Jerome Powell attributing the rise primarily to upcoming tariff measures. Additionally, the FED downgraded its U.S GDP growth projection to +1,7% for 2025, down from +2,1% in December. The combination of slowing growth and rising prices - often referred to as stagflation - could limit the FED’s ability to aggressively cut interest rates in an effort to mitigate recession risks. The U.S Q1 2025 GDP report (set for release on April 30) is likely to be the most critical economic data point for the market, determining whether concerns over the weakening U.S economy materialize and influencing the FED’s next policy moves.

The USD/VND interbank exchange rate rose by 25 VND to 25.550 yesterday. Meanwhile, a sharp rally in domestic gold prices partially contributed to the parallel market exchange rate surpassing 25.900. The market has now received clearer guidance from the FED following its March meeting, supporting a USD rebound (+0,25%) last night. The exchange rate is expected to surpass 25.600 today, with large-scale USD buying anticipated.

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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