Market Highlight 30.09.2024

The U.S dollar declined by an additional 0,15% last Friday, marking its fourth consecutive week of losses after the release of personal consumer expenditure (PCE) data, which indicated that inflationary pressure in the U.S. continues to ease. The PCE index rose by just 0,1% in August, following a 0,2% increase in July. Year-over-year, the index has now increased by 2,2%, down from 2,5% in the previous month. Moreover, consumer spending, which accounts for more than two-thirds of U.S economic activity, rose by only 0,2% last month, following a 0,5% rise in July. This figure came in slightly below the 0,3% estimate but still reflects the sustained growth of the world’s largest economy in the third quarter. Last week, the Federal Reserve surprised the market by implementing a significant 0,5% policy rate cut in its initial move. However, given the weaker-than-expected PCE data and consumer spending, this decision has proven to be well-founded. The market now anticipates a 60% chance that the FED will make another 0,5% rate cut in November.

This week, additional signals will help the market better determine the scope of the FED’s next rate cut, with a speech by the FED Chair on Tuesday morning and the release of the critical U.S non-farm payroll report for September on Friday. The health of the U.S labor market remains the key focus for gauging the pace at which the FED will need to cut rates in the coming months.

The USD/VND exchange rate saw a slight decrease of about 30 VND last week, setting the stage for its third consecutive monthly decline. The market closed at 24.610 on Friday, though at one point during the day, it fell to as low as 24.585. The exchange rate is expected to see further declines at the start of this week, coinciding with the final trading day of Q3, with a target range of 24.500 to 24.600.

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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