Deep decline in domestic market
While the gold and stock markets have experienced many ups and downs and attracted attention by continuously setting new important milestones, the foreign exchange market seems to be gradually fading away. The USD has not had strong fluctuations but has been "silently" decreasing steadily.
At the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the USD/VND exchange rate closed the week at 24,050 VND/USD - 24,390 VND/USD, down 60 VND/USD in both buying and selling directions, equivalent to 0.25% compared to the end of last week.
Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) fixed the exchange rate at: 24,080 VND/USD - 24,380 VND/USD, down 65 VND/USD, equivalent to 0.27% after 1 week of trading.
Despite recovering after a series of gloomy days in the world, the USD has fallen sharply in the domestic market. Illustrative photo
The USD/VND exchange rate at Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) is listed at: 24,010 VND/USD - 24,430 VND/USD, down 80 VND/USD, equivalent to 0.33%.
At commercial banks, the USD has an uneven rate of decline.
At the end of this week, the USD/VND exchange rate at Orient Commercial Joint Stock Bank (OCB) was exchanged at: 24,035 VND/USD - 24,505 VND/USD, down 94 VND/USD for buying, equivalent to 3.9% and down 86 VND/USD for selling, equivalent to 3.5% compared to the end of last week.
Vietnam Technological and Commercial Joint Stock Bank (Techcombank) closed the week with USD at: 24,075 VND/USD - 24,408 billion VND/USD, down 50 VND/USD on buying, equivalent to 0.21% and down 60 VND/USD on selling, equivalent to 0.25%.
It can be seen that the USD is gradually decreasing in the banking market. However, in the free market, the greenback suddenly increased sharply in the last session of the week.
Before the trading week closed, the free USD price was adjusted up by about 60 VND/USD to 24,630 VND/USD - 24,680 VND/USD for sale. Currently, the free USD price is about 280 VND/USD more expensive than the USD price in the banking market.
Recovery in the world market
It can be seen that in the domestic market, the main trend of the dollar is to decline despite the greenback showing signs of recovery.
The dollar rose in late trading after new data showed US job growth accelerated in November and the unemployment rate fell, pointing to underlying strength in the labor market.
The US dollar index was last up 0.3% at 104.0, on track for a modest weekly gain after a dismal November when the index fell 3%. For the week, the greenback gained 0.7% in global markets.
The yen fell 0.52 percent against the dollar to 144.35, after its biggest rally in nearly a year the previous day.
The U.S. Department of Labor's Bureau of Labor Statistics said Friday that U.S. nonfarm payrolls added 199,000 jobs last month. Economists polled by Reuters had forecast 180,000 jobs were created.
The jobs report showed the unemployment rate fell to 3.7%, suggesting financial market expectations that the US Federal Reserve (Fed) could move to cut interest rates as early as the first quarter of 2024 are premature.
“There’s nothing in the data so far that would force the Fed to abandon its ‘let’s see what happens’ stance,” said Steven Englander, head of global G10 FX research at Standard Chartered Bank. “The market is clearly leaning the other way.”
Traders of short-term U.S. interest rate futures on Friday reduced bets that the Fed would start cutting rates in March following the report, and now see a higher likelihood of a rate cut in May.
The market had previously priced in a roughly 60% chance that the Fed would start cutting rates in March, but after the readings, that chance dropped to just under 50%.
“In the short term, I think the US interest rate market has just become too dovish for the Fed,” said Stephen Miran, co-founder of Amberwave Partners. “Financial conditions have eased significantly since early November, which essentially means the Fed doesn’t need to cut rates to add fuel to the fire.”
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