Market Highlight 31.12.2025

The Minutes of the US Federal Reserve’s December meeting indicate a rising degree of caution, lowering the likelihood of further interest-rate cuts in early 2026. When the Federal Reserve (FED) convened to reduce interest rates in December, several members signalled reluctance to support additional easing in the near term, according to the Minutes released last night - an indication that further rate cuts could face resistance at the next meeting in January 2026. Most members of the FED’s policy committee agreed that interest rates could be reduced further if inflation continued to ease. However, reaching consensus on additional rate cuts has become increasingly difficult as price pressures persist at levels above the FED’s desired range.

The FED cut interest rates at three consecutive meetings toward the end of 2025 in an effort to mitigate the adverse impact of a weakening labour market. Nonetheless, several members opposed the December rate cut, citing concerns that progress toward returning inflation to the 2% target had stalled over the course of the year. Data released after the FED’s meeting showed inflation easing in November, although recent assessments suggest that the US Government shutdown may have distorted these figures. Against this backdrop, it may require sufficiently negative signals in the December employment report - scheduled for release on 9 January - to prompt the FED to deliver a fourth consecutive rate cut at its meeting on 27 - 28 January.

On the interbank market, the USD/VND exchange rate continued to decline yesterday, hitting an intraday low of 26.260 under pressure from heightened VND demand toward year-end. The market closed the day at 26.270, while the effective trading band ceiling stood at 26.380. The interbank exchange rate is expected to trade steadily around the 26.220 - 26.280 range today.

Please contact the nearest Asia Commercial Joint Stock Bank's branch to receive information and consultancy if you are in need of making any foreign exchange and derivatives transactions.

Asia Commercial Joint Stock Bank assumes no responsibility or liability for any purpose of reference or using the information provided by this newsletter.

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