Slight increase in domestic
The General Statistics Office (GSO) has just announced the US dollar index in 2023. GSO said that in the world, the price of the US dollar tends to decrease as the global economic outlook is weakening. As of December 25, 2023, the US dollar index on the international market reached 102.94 points, down 2.02% compared to the previous month.
Domestically, the average US dollar price in the free market is around 24,426 VND/USD. The US dollar price index in December 2023 decreased by 0.56% compared to the previous month; increased by 1.04% compared to the same period last year; the average in 2023 increased by 1.86%.
However, at some banks, the USD/VND exchange rate increased faster than the general index.
In 2023, exchange rates at commercial banks increased by about 3% after 1 year of trading, the increase was lower than bank interest rates. Illustrative photo
At the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the USD/VND exchange rate closed in 2023 at: 24,080 VND/USD - 24,420 VND/USD, up 670 VND/USD, equivalent to 2.86% on the buying side, up 690 VND/USD, equivalent to 2.91%.
Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) fixed the USD/VND exchange rate in 2023 at: 24,110 VND/USD - 24,410 VND/USD, up 705 VND/USD, equivalent to 3.01% for buying, up 725 VND/USD, equivalent to 3.06% for selling.
The USD/VND exchange rate at Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) listed in the last session of 2023 was: 24,005 VND/USD - 24,425 VND/USD, up 645 VND/USD, equivalent to 2.69% in the buying direction and up 665 VND/USD, equivalent to 2.8%.
After 1 year of trading, the USD/VND exchange rate at the Vietnam Bank for Agriculture and Rural Development (Agribank) was adjusted up 690 VND/USD, equivalent to 2.95% for buying, up 710 VND/USD, equivalent to 3% for selling to: 24,100 VND/USD - 24,420 VND/USD.
At commercial banks, the US dollar tends to go up slightly stronger.
At Vietnam Technological and Commercial Joint Stock Bank (Techcombank), the USD/VND exchange rate in 2023 will stop at: 24,100 VND/USD - 24,450 VND/USD, an increase of 710 VND/USD, equivalent to 3.04% in buying price, an increase of 720 VND/USD, equivalent to 3.03% in selling price.
Exchange rate at Orient Commercial Joint Stock Bank (OCB) closed in 2023 at: 24,130 VND/USD - 24,387 VND/USD, up 735 VND/USD, equivalent to 3.14% on the buying side, up 712 VND/USD, equivalent to 3.01%.
It can be seen that the exchange rate at commercial banks increased by about 3% after 1 year of trading, the increase was lower than the bank interest rate.
First decrease since 2020 worldwide
The US dollar rose in the domestic market but fell globally.
The dollar ended 2023 with its first decline since 2020 against the euro and a basket of currencies on expectations that the US Federal Reserve will start cutting interest rates next year as inflation moderates.
The questions for 2024 will be when the Fed starts cutting and whether the first rate cut is done to avoid over-tightening as inflation falls or because US economic growth is slowing rapidly.
“We have weakened quite a bit on expectations for the upcoming Fed rate-cutting cycle,” said Brad Bechtel, global head of foreign exchange at Jefferies in New York.
The dollar ended 2023 with its first decline since 2020 against the euro and a basket of currencies. Illustration photo
The dollar's decline accelerated after the Fed adopted an unexpectedly dovish stance and forecast a 75 basis point rate cut by 2024 at its December policy meeting.
Markets are pricing in even more aggressive cuts, with the first cut likely in March and a 154 basis point cut expected by the end of the year.
The Fed's stance contrasts with other major central banks, including the European Central Bank (ECB) and the Bank of England (BoE), which have said they will keep interest rates higher for longer.
Against a basket of currencies, the greenback rose 0.1% on Friday – its last trading session of 2023 was at 101.36, up from a five-month low of 100.61 hit on Thursday. It ended the year down 2%.
The euro fell 0.2% to $1.1037, although it posted a 3.1% gain on the year, its first positive gain since 2020.
“Markets are expecting an earlier cut in the US and there is less certainty that the European Central Bank will cut quickly, so that is why the dollar is so weak,” said Niels Christensen, chief analyst at Nordea.
“We also have positive risk appetite, which is another negative for the dollar. Going into 2024, a soft dollar will be a theme at the central bank meetings in March,” Christensen added.
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