USD/VND exchange rate is about to return to 24,000 VND
The focus of the financial market this week is the continuous sharp decline in deposit interest rates. Savers are “shocked” when interest rates change dramatically overnight. And the main trend is down and down.
Lower interest rates help stocks “fly high”. Besides stocks, there is another financial market that is also “heating up”. That is foreign currency. The USD/VND exchange rate has recorded another “roller coaster” week – sometimes increasing sharply, sometimes decreasing sharply. But overall, the USD is still stronger throughout the week.
At the end of the week, Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) "fixed" the USD/VND exchange rate at: 23,550 VND/USD - 23,970 VND/USD, up 30 VND/USD (equivalent to 0.13%) in both buying and selling compared to the end of last week. It can be seen that the exchange rate is close to 24,000 VND/USD in selling. VietinBank is a rare unit with a price close to 24,000 VND/USD.
After a week of "roller coaster", the USD/VND exchange rate still maintains its upward momentum and is about to reach the 24,000 VND mark. Illustrative photo
At the remaining units, the selling price is only slightly higher than 23,900 VND/USD.
The USD/VND exchange rate at the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) closed the week at: 23,570 VND/USD - 23,910 VND/USD, up 20 VND/USD in both buying and selling directions.
Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) listed the exchange rate at: 23,605 VND/USD - 23,905 VND/USD, an increase of 25 VND/USD compared to the end of last week.
The USD/VND exchange rate at joint stock commercial banks also tends to go up mainly.
At Vietnam Export Import Commercial Joint Stock Bank (Eximbank), after a week of trading, the USD/VND exchange rate increased by 30 VND/USD in both buying and selling directions to 23,610 VND/USD - 23,910 VND/USD.
The USD/VND exchange rate at Vietnam Technological and Commercial Joint Stock Bank (Techcombank) and Tien Phong Commercial Joint Stock Bank (TPBank) is traded at: 23,595 VND/USD - 23,930 VND/USD and 23,530 VND/USD - 23,960 VND/USD, respectively.
In the free market, the US dollar also could not avoid the upward trend. At Hang Bac and Ha Trung - the "foreign currency streets" in Hanoi, the USD/VND exchange rate traded on the weekend was: 23,750 VND/USD - 23,820 VND/USD. At different stores, the difference was about 10 VND/USD.
USD continues to be "hot" in the world market
In the world market, the "duel" between the US dollar and Japanese yen became the center of attention.
The dollar rose on Friday after a slightly stronger increase in U.S. producer prices in July lifted Treasury yields higher even as speculation mounted that the Federal Reserve was nearing the end of its interest rate hikes.
The dollar index, a gauge of the greenback against six peers, rose 0.31% to 102.85 as it headed for a fourth straight weekly gain, having gained about 2.9% after bouncing off a 15-month low in mid-July on signs of recovery in the U.S. labor market.
A stronger dollar sent the yen briefly touching 145.03 in late afternoon trading, its highest since June 30. Photo: Getty Images
Data since then has shown a slowing pace of inflation, raising the possibility that the Fed will not raise rates further. But yields have moved higher after the Treasury raised its estimate of borrowing in the third quarter.
Marvin Loh, senior global macro strategist at State Street in Boston, said the inflation data was encouraging but achieving the Fed's 2% sustainable inflation target would require a less robust labor market.
“The work won’t be done until we get CPI prints that are stable around 2% and we get a job market that is considered balanced,” Loh said.
Futures traders now see an 88.5% chance that the Fed will leave its benchmark interest rate unchanged at its current range of 5.25-5.5% when policymakers meet in September. Before the inflation data, that chance was above 85%.
A stronger dollar sent the yen briefly touching 145.03 in late afternoon trading, its highest since June 30.
The dollar closed the week at 144.94 yen, up 0.15% on the day.
“You should expect some rhetoric when the yen hits 145. I think the market will be a lot more cautious when we get to that level,” said Moh Siong Sim, a currency strategist at Bank of Singapore.
Japan intervened in the currency market last September when the dollar rose above 145 yen, prompting the Ministry of Finance to buy yen and push the pair back to around 140 yen. The yen has fallen more than 10% against the dollar this year.
Meanwhile, sterling rose for the first time in four days after data showed the UK economy grew more than expected in June, easing some concerns about the impact of high inflation and high interest rates on activity.
The pound was last trading at $1.2699, up 0.19% on the day, but still headed for a fourth weekly decline.
Elsewhere on Friday, the euro fell 0.3% to $1.0946 and the dollar fell 0.06% against the Swiss franc.
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