Market Highlight 20.06.2025

   The USD Index held at its highest level since February on Tuesday, as escalating tensions between Israel and Iran continued to dominate global financial markets. Meanwhile, a series of unexpected policy rate cuts in Europe - most notably in Switzerland and Norway - has underscored the challenges central banks face in navigating rising global instability. Heightened geopolitical risk in the Middle East has recently reinforced the dollar’s safe-haven appeal. Unlike domestic risks such as fiscal imbalances stemming from proposed tax cuts or the inflationary pressures and supply chain disruptions triggered by President D. Trump’s tariff policies, the current upward pressure on oil prices - driven by geopolitical volatility - represents an external risk to the U.S economy.
   According to the Ministry of Industry and Trade, Vietnam’s total trade turnover for the first half of 2025 is estimated to reach between USD 426 billion and USD 430 billion, up approximately 15,5% to 15,8% year-over-year. Exports are projected at USD 215 - 217 billion, rising by 13,8% to 14%, while imports are estimated at USD 211 - 213 billion, up by 17% to 17,2%. The resulting trade surplus is expected to range between USD 3,5 billion and USD 4 billion. Export performance is likely to strengthen in the second half of the year, supported by recovering orders from key markets such as the U.S and the EU - particularly in electronics, textiles, and agricultural products. The continued push by advanced economies to diversify supply sources, investment destinations, and value chains is positioning Vietnam as an increasingly vital production and export hub within the global value network.
    Domestically, the USD/VND interbank exchange rate hit a new all-time high of 26.135 on Tuesday, marking a 2,52% increase since the beginning of the year. The effective daily ceiling rate stood at 26.276. The dollar’s global strength - fueled by Middle East instability - along with rising foreign currency demand from domestic corporates, continued to underpin upward momentum in the exchange rate. The trading band for today is projected to remain in the 26.100 - 26.200 range.

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