Free USD increases shockingly
At the beginning of the week, the USD on the free market suddenly increased dramatically and headed towards the 25,000 VND mark. After that, the greenback cooled down to 24,750 VND/USD – 24,830 VND/USD on December 18. In this morning’s trading session, the free USD exchange rate increased dramatically again.
At Hang Bac and Ha Trung - famous "foreign currency streets" of Hanoi, the USD/VND exchange rate is commonly traded at: 24,850 VND/USD - 24,930 VND/USD, an increase of 100 VND/USD compared to yesterday. At different stores, the difference is about 10 VND/USD.
It can be seen that the free USD is approaching the 25,000 VND/USD mark. Meanwhile, in the banking market, the USD exchange rate is disoriented, some places increase, some places decrease, some places remain unchanged.
At the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the USD/VND exchange rate is being traded at: 24,390 VND/USD - 24,730 VND/USD, an increase of 5 VND/USD in both buying and selling directions compared to the end of yesterday.
The USD is increasing dramatically in the free market, heading towards the 25,000 VND mark but losing direction in the bank. Illustrative photo
In the opposite direction, Vietnam Prosperity Joint Stock Commercial Bank (VPBank) adjusted the USD price down by 5 VND/USD in both buying and selling directions to 24,403 VND/USD - 24,713 VND/USD.
Meanwhile, many units have not changed their listings. At the Bank for Investment and Development of Vietnam (BIDV), the USD is traded at: 24,410 VND/USD - 24,710 VND/USD. The USD exchange rate at the Bank for Agriculture and Rural Development of Vietnam (Agribank) is listed at: 24,400 VND/USD - 24,720 VND/USD. Vietnam Technological and Commercial Joint Stock Bank (Techcombank) trades the USD at: 24,400 VND/USD - 24,710 VND/USD, unchanged from yesterday's closing price.
Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) is a special case. The USD/VND exchange rate is currently trading at: 24,393 VND/USD – 24,733 VND/USD, up 43 VND/USD for buying but down 37 VND/USD for selling.
Thus, at present, the USD price in the market continues to be higher than in the free market.
World USD headed for 2 consecutive weeks of increase
In global markets, the dollar headed for a second straight weekly gain on Friday on signs of recovery in the US economy and warnings of interest rate cuts from central banks.
Weekly gains for the risk-sensitive Australian and New Zealand dollars of 1.7% and 2.1% were seen as the biggest since November and June, respectively. Markets are pricing in a 57% chance of a US rate cut in March, down from 75% a week ago.
The dollar index rose 0.9% to 103.4 for the week and was at 148.12 yen. The dollar has gained nearly 5% against the Japanese currency this year as confidence that the Bank of Japan (BOJ) is about to raise interest rates has also been shaken.
Data on Friday showed Japan's core inflation fell to 2.3% in the year to December, the lowest annual pace since June 2022 - seemingly vindicating policymakers' wait-and-see approach.
“The market recognises that rate hikes will not be easy for the BOJ in the coming months and the re-pricing of the Fed rate cut risk coincides with the dollar/yen rally,” said Jane Foley, strategist at Rabobank.
Rabobank revised its one-month forecast for dollar/yen to 148 from 144, expecting further reductions in bets on the pace of US rate cuts to support the dollar.
Currency moves in early Asia were modest on Friday, with the euro down 0.7% for the week at $1.0878 and sterling down 0.3% at $1.2708.
Earlier data showed retail sales rose more than expected in December. Federal Reserve Governor Christopher Waller said on Tuesday that the strength of the U.S. economy gives policymakers the flexibility to move “carefully and slowly” in what traders see as a push back against pricing in a rapid rate cut.
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