Free USD "stabilizes" at 25,000 VND
The foreign exchange market has been bustling since the end of 2023. Entering the first days of 2024, the heat has increased. The USD/VND exchange rate has continuously increased and successfully conquered the 25,000 VND/USD mark in the free market.
In the new week, the USD suddenly took a break and fell quite sharply. However, the free USD still "stuck" at 25,000 VND/USD.
Specifically, at Hang Bac and Ha Trung - famous "foreign currency streets" in Hanoi, the USD/VND exchange rate is commonly traded at 24,900 VND/USD - 25,000 VND/USD, down about 20 VND/USD compared to last weekend. However, the mark of 25,000 VND/USD is still maintained. At different stores, the difference is about 10 VND/USD.
While the banking market has seen a sharp decline, the USD in the free market is still "holding firm" at 25,000 VND/USD. Illustrative photo
Meanwhile, in the banking market, the USD/VND exchange rate fluctuates more strongly than in the free market.
At the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the USD/VND exchange rate is listed at: 24,400 VND/USD - 24,740 VND/USD, down 25 VND/USD in both buying and selling compared to the end of last week.
The USD/VND exchange rate at the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is being exchanged at 24,435 VND/USD - 24,745 VND/USD, down 25 VND/USD.
The USD/VND exchange rate at Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) fluctuated in opposite directions when listed at: 24,435 VND/USD - 24,775 VND/USD, up 45 VND/USD for buying, down 35 VND/USD for selling.
The US dollar has increased by 2% in the world market.
Meanwhile, in the world market, the USD has had nearly a successful month.
The dollar index, which measures the greenback against a basket of major currencies, was trading around 103.52 after rising about 0.2% overnight. It has gained about 2% this year.
US Treasury yields fell, with the benchmark 10-year yield down at 4.11% in Asian morning trade.
Markets are betting there is a 50% chance of a rate cut in March, down from 75.6% a month ago, according to the CME FedWatch tool.
“Pressure on yields and the dollar could increase if December PCE falls more than expected today,” said Charu Chanana, head of currency strategy at Saxo in Singapore.
The euro was last at $1.0841, after sliding to a six-week low of $1.08215 on Thursday.
The European Central Bank (ECB) stood firm at its policy meeting on Thursday as expected, although traders had been betting the bank would cut interest rates from April as it interpreted policymakers as growing more comfortable with the inflation outlook.
The ECB’s rejection of market bets on a rate cut in April was “in the direction of less direct and more positive sentiment than recorded on wages”, which has fuelled rising expectations and “underscored the bearish outlook for the euro”, said Chanana.
The British pound was around $1.2703. The Bank of England will announce its latest interest rate decision next Thursday.
Elsewhere, the yen was stuck at 147.56 per dollar, after it inched down further overnight from recent lows reached earlier this week after the Bank of Japan took a more hawkish stance.
Data on Friday showed core inflation in the Japanese capital fell to 1.6% in January from a year earlier, below the central bank's 2% target.
“The fall in inflation below 2% in Tokyo last month is widely believed to cast doubt on the Bank of Japan’s readiness to end negative interest rates,” Marcel Thieliant, head of capital markets for Asia-Pacific, wrote in a note.
The focus in the coming months will be on whether wages will rise enough to shore up consumption and help Japan sustainably reach the Bank of Japan's 2% inflation target.
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