Market Highlight 20.07.2026

The European Central Bank is likely to postpone its second rate hike of the year this Thursday, while keeping the door open for a rate increase in September. After raising interest rates in June due to the sharp increase in energy prices, the ECB expressed confidence that peace negotiations between Washington and Tehran would limit the impact of the conflict on consumer prices in the European region. ECB President Christine Lagarde may rely on economic data released before the September meeting, including two inflation readings and Q2 GDP growth data. However, escalating fighting in Iran and renewed uncertainty over waterway traffic through the Strait of Hormuz have worsened the situation. These new developments may ultimately persuade the ECB Governing Council to raise interest rates again for the European region at its upcoming meeting on 10/9.

The USD ended the week down by -0,21% after softer U.S inflation data led the market to reduce expectations of an imminent FED rate hike. Tensions between the U.S and Iran escalated continuously last week, breaking down last month’s ceasefire agreement, boosting safe-haven demand for the USD, and pushing oil prices close to a one-month high. U.S retail sales edged higher in June as lower gasoline prices weighed on service-station revenue. However, online spending rose strongly, prompting economists to raise their forecasts for U.S Q2 GDP growth. The market expects the FED to keep its policy rate unchanged at the end of this month after data showed that consumer inflation eased in June.

Interbank USD/VND rebounded by nearly VND 35 on Friday and closed the day above 26.290. The SBV continued to raise the central rate sharply by a further VND 11, lifting the effective daily ceiling to 26.516.

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