USD index highest in 2 years, how does the exchange rate in Vietnam fluctuate?

(NLDO) – The USD index on the international market reached its highest level in 2 years despite the FED cutting interest rates for the third time, and the USD/VND exchange rate also increased sharply.

Contrary to market expectations that the USD index (DXY) would fall after the US Federal Reserve (FED) cut interest rates for the third time this year, DXY hit a new peak.

At 9:00 a.m. on December 19, Vietnam time, the DXY index was at 107.79 points, a sharp increase compared to the previous session. During the session, the USD index reached 108 points at one point, the highest level in the past 2 years.

The USD soared despite the FED's interest rate cut. Analysts explained that the reason was because FED Chairman Jerome Powell said that the interest rate cut roadmap in 2025 would slow down, with only 1-2 more cuts, instead of 3-4 as previously forecast. The slower pace of interest rate cuts helps the USD maintain its strength.

The international stock market was red after the FED's announcement, with Japanese and Korean stock indexes falling sharply. In the US stock market, the Dow Jones index fell 2.58%; the S&P 500 index fell 2.95% and the Nasdaq Composite fell 3.56%...

The US dollar index increased sharply in the international market.

In the domestic foreign exchange market, the central exchange rate this morning was listed by the State Bank at 24,304 VND/USD, an increase of 26 VND/USD compared to yesterday.

With a trading range of +/-5%, commercial banks sold the highest at 25,519 VND/USD.

Specifically, Vietcombank bought USD at 25,219 VND/USD and sold at 25,519 VND/USD, an increase of 28 VND compared to yesterday.

This is also the selling price of USD at BIDV, VietinBank, and Eximbank. In the buying direction, BIDV listed the price at 25,219 VND/USD; VietinBank bought at 25,241 VND/USD while Eximbank bought at a higher price of 25,250 VND/USD.

US dollar index hits 2-year high

Thus, banks are trading USD at the maximum allowed margin.

Commenting on the USD/VND exchange rate in the coming time, in the latest economic update report on Vietnam, Standard Chartered Bank forecasts that the USD will increase strongly in 2025 but will weaken in the early part of the year.

The Fed's interest rate cut is expected to support Asian currencies, including the VND. However, better-than-expected US economic data has added pressure to the Asian foreign exchange market.

“Factors such as trade policy uncertainty and potentially inflationary measures under President Trump could undermine monetary policy stability in the region.

Standard Chartered forecasts that the FED's interest rate cut could lead to a weakening trend of the USD in the next few quarters, leading to the USD/VND exchange rate at 25,250 VND by the end of 2024 and 25,450 VND in the second quarter of next year," said Mr. Tim Leelahaphan, regional economist for Thailand and Vietnam at Standard Chartered.

Source: https://nld.com.vn/chi-so-usd-cao-nhat-trong-2-nam-ti-gia-tai-viet-nam-bien-dong-ra-sao-196241219093042309.htm