Market Highlight 21.02.2025

The USD Index posted a sharp decline of nearly 0,8% last night following weaker-than-expected U.S economic data and the absence of further escalations in trade tensions. U.S initial jobless claims for the past week rose to 219.000, exceeding market expectations. Meanwhile, the monthly manufacturing index released by the Philadelphia Federal Reserve plummeted by 26,2 points, marking the largest drop in nearly 5 years, to 18,1 points in February, down from 44,3 points in January. The U.S economy’s growth momentum is slowing at the start of 2025, failing to provide the necessary support for the USD, while the Federal Reserve’s monetary policy stance of pausing rate cuts offers limited upside for the greenback. However, trade tensions remain the market’s primary concern, even though their impact appears to be diminishing as investors have gradually adjusted to President D. Trump’s tariff threats.

The Chinese yuan (CNY) appreciated against the USD (+0,38%) yesterday as market sentiment improved following President D. Trump’s remarks that a new trade deal with China remains possible. The latest round of tariff threats from the new U.S administration has placed significant pressure on the CNY in recent months. During Trump’s first presidential term, a series of retaliatory tariff announcements between the U.S and China led to a more than 12% depreciation of the CNY against the USD from March 2018 to May 2020. Market forecasts still lean toward the USD/CNY exchange rate surpassing the 7,5 level if trade tensions escalate further.

The USD/VND exchange rate traded within a narrow range of 25.520 - 25.550 throughout yesterday’s session, closing at 25.525. A corrective move could emerge early today, bringing the exchange rate down to the 25.450 level. However, strong USD demand is expected to return during market corrections, given the current trading environment.

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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