Market Highlight 28.08.2024

    The U.S. dollar fell to its lowest level in a year (100,5 level) yesterday as the market awaited a series of key economic data from the U.S later this week. The prospect of the Federal Reserve preparing to cut interest rates next month continues to exert downward pressure on the greenback, with the market seeking signals that the FED might opt for a more aggressive rate cut of 0,5% instead of the expected 0,25%. In August, the dollar has already lost 3,2% of its value and is on track to record its largest monthly decline since November 2022. Notable economic data released last night showed that U.S home prices fell by 0,1% from the previous month after remaining flat in May. The Consumer Confidence Index rose to 103,3 in August from 101,9 in July. However, the market reaction to yesterday's data was muted. The market is now focused on the upcoming reports this week, including Q2 GDP growth, weekly jobless claims, and the U.S Personal Consumption Expenditures (PCE) index, the FED’s preferred measure of inflation. Technically, the short-term outlook for the dollar remains quite negative as the USD Index has fallen below the strong support level of 100,61 points. If it continues to break below the 99,57 level (the 2023 low), the dollar could target the next level of 96,73 points, or even the longer-term support level of 94,61 points, before forming a bottom.

    At the opening of the trading session yesterday, the interbank USD/VND exchange rate quickly adjusted down by 70 dongs to 24.805 as selling pressure surged early in the session. A recovery occurred in the afternoon thanks to some foreign currency purchases for same-day payments, helping the exchange rate close at 24.830. The downward adjustment pressure is expected to persist as the market prepares for the upcoming September 2nd holiday.

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