Market Highlight 28.04.2026

The European Central Bank (ECB) and the Bank of England (BOE) are expected to keep their policy rates unchanged this Thursday as they wait for a clearer assessment of the timing and scale of the energy shock associated with the conflict in the Middle East. At their most recent meetings in March, Europe’s leading Central Banks made it clear that they stand ready to raise interest rates in response to the sharp increase in energy prices. In the weeks that followed, the ECB further clarified its stance, emphasizing that rates would only be raised if wages and the prices of a broad range of goods and services also begin to move higher. In reality, inflation in Europe has already returned as a consequence of the war. In the euro area, consumer prices in March were 2,6% higher than a year earlier, accelerating from the 1,9% increase recorded in February. In the UK, inflation rose to 3,3% from 3%. As the Strait of Hormuz remains blocked to maritime shipping, pushing energy prices higher, inflation is now expected to exceed pre-war forecasts. What concerns monetary policymakers is that the longer the strait remains blocked and the higher energy prices climb, the more likely businesses are to raise product prices to offset higher costs, while workers also intensify pressure for wage increases. If the strait remains closed, there is a possibility that the ECB or the BOE, or both, will raise policy rates, with the ECB more likely to move first.

USD/VND rose by a further VND 20 in the final trading session last week and closed last Friday at 26.360. The continued recovery of the USD in global markets has supported the exchange rate trend. The SBV raised the central rate by VND 8, implying an effective central rate of 26.368 for the day.

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