Market Highlight 30.08.2024

   The USD Index rose for the second consecutive day (+0,33%) after data showed that the world’s largest economy grew faster than expected in Q2, reducing expectations of a 0,5% rate cut by the Federal Reserve next month. The U.S Gross Domestic Product (GDP) grew at a 3% pace in the second quarter, higher than the 2,8% initially reported last month and significantly above the 1,4% growth recorded in the first quarter. So far, U.S economic data seems to support a 0,25% rate cut by the FED, with the market pricing in about a 70% likelihood of this outcome. However, there are still two key economic reports that could significantly impact the FED’s decision before the September meeting begins. The July U.S Personal Consumption Expenditures (PCE) Index, the FED’s preferred measure of inflation, is set to be released tonight and could provide further insight into the magnitude of the rate cut in September, including the pace of the upcoming easing cycle. The greenback is on track for its first weekly gain (+0,7%) after 5 consecutive weeks of declines. However, for August, the USD is down 2,7% compared to the end of the previous month. The recent decline in the USD is considered excessive, and a short-term recovery may soon emerge, potentially pushing the USD Index up to the 101.9 level before the downtrend resumes. 
   The USD/VND exchange rate briefly rose above 24.900 yesterday, supported by additional USD payment demands during the day. However, the exchange rate struggled to maintain this level as selling pressure quickly emerged, pushing the rate down to close at 24.885. The 24.900 range is expected to remain the dominant trading zone on the market’s final day before the September 2 holiday.

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