Market Highlight 27.06.2024

The JPY fell to its lowest level in 38 years against the USD (160,82) last night amidst a significant interest rate differential between the two leading world economies. Since the beginning of the year, the JPY has depreciated approximately 14% against the USD, following a nearly 8% decline last year. In the price range of April and May, Japan's Ministry of Finance had to utilize about 62 Billion USD in market sales to help stabilize its currency. However, these one-sided currency intervention efforts are so far deemed unsuccessful. The USD/JPY exchange rate surpassing 160 again raises market concerns about further Japanese intervention. Estimates suggest that the Japanese government has reserves of 200-300 Billion USD for potential future interventions, but these measures are expected to merely slow down the JPY's depreciation until the FED reverses its interest rate policy. The USD/JPY exchange rate is forecasted to reach 170 in Q3 if the FED maintains its stance of only one rate cut by the end of this year.

The USD Index rose more than 0,4% last night, supported by the increase in US government bond yields ahead of the crucial inflation (PCE) data release this Friday. Meanwhile, new home sales in the U.S in May fell to a six-month low, reinforcing previous assessments of a slowdown in the world's largest economy in Q2.

The USD/VND interbank exchange rate increased by 7 Dong yesterday while the effective ceiling rate for the day was 25.471. The pressure from the demand side is expected to remain high until early July, continuing to influence the exchange rate trend.

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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