Market News on March 29, 2023

FORECAST FOR THE DAY
RATE USD/VND

USD/VND RATE TRENDING

Market sentiment:

Domestic: Data released by the General Statistics Office shows that Vietnam's GDP in the first quarter of 2023 increased by 3.32% over the same period last year, slowing down from the increase of 5.92% in the last quarter of 2022. This increase was also much lower than the expectation of 4.8% as well as most previous forecasts. Vietnam's export-dependent economy is taking a hit as many of its major trading partners adopt tighter monetary policies to control inflation, which has reduced demand for goods, with exports of the country shrank in 4 out of 6 recent months. Vietnam targets export growth of around 6% in 2023, compared with 10.5% last year. With the forecast that the world economic situation is still difficult, in order to support businesses and the economy, the State Bank of Vietnam has decided to lower a series of effective operating interest rates from March 15.

Some other notable macro data of Vietnam compared to the same period last year can be mentioned such as: exports decreased by 14.8%, CPI increased by 3.35% in March. Trade surplus at the end of the year. the first quarter is estimated at 4.07 billion USD compared to the surplus of 3.2 billion USD recorded at the end of February. Industrial production in the first quarter fell 2.3% from a year earlier, while total retail sales of goods and services revenue in the country rose 13.9%.

USD/VND exchange rate weakened back to below 23,500 thanks to abundant foreign currency supply to the market combined with trade balance maintaining a surplus and some large-scale capital sales transactions of enterprises. domestic industry for foreign partners. We continue to maintain our recommendation that the next target level of the rate is 23.450.

World: The USD Index dropped for the second day in a row (-0.4%) yesterday as the market focused on monitoring the health of the US banking system. It is expected that this is still the main driving factor to the strength of the dong
USD in the context of the next Fed policy meeting in May.

TRENDING CURRENCY pairs
AUD/USD:

The AUD is gradually regaining strength against the USD this week as worries about the health of the banking system have eased. However, history shows that financial crises, especially related to the banking system, usually last for many years, so the recovery of the AUD is considered uncertain. Speaking last night, Mr. Michael Barr, vice chairman of supervision of the US Federal Reserve, said that SVB's problems were caused by the bank's weak risk management system, suggesting that this may be the case. This is an individual case rather than an industry-wide trend.

AUD/USD gained nearly 0.9% in yesterday's session but fell back at the open this morning after the monthly inflation data unexpectedly cooled. Specifically, the consumer price index (CPI) fell to 6.8% in February, from 7.4% in the previous month and according to market forecasts of 7.1%. This data also confirms that Australia's inflation may have peaked in December and is expected to cool down to 4% by the end of the year. With the domestic economy weakening, inflation slowing and risks in the global banking sector raising expectations that the Reserve Bank of Australia might pause to raise interest rates next week and perhaps the end. for the entire tightening roadmap lasting the past 10 months. The market is assessing about a 5% chance of the RBA raising rates next week, compared with 15% before the CPI data is released.