Strong increase at the beginning of the week, "plummet" at the end of the week
This week, the focus of financial markets was gold. Gold prices fluctuated wildly and continuously set new records. However, that does not mean that the foreign exchange market was overshadowed. The USD/VND exchange rate fluctuated like a “roller coaster”, increasing sharply at the beginning of the week but “plummeting” at the end of the week.
Specifically, at the end of this week, the USD/VND exchange rate at the Joint Stock Commercial Bank for Foreign Trade of Vietnam stopped at 24,060 VND/USD - 24,400 VND/USD, down 10 VND/USD, equivalent to 0.04% compared to the end of last week.
0.04% is a very modest fluctuation, not reflecting the ups and downs that the greenback has experienced during the week. In the first trading session of the week (December 18), the USD/VND exchange rate increased sharply, increasing by 70 VND/USD to 24,140 VND/USD - 24,480 VND/USD. On December 19, the USD reached the "peak" of the week when it rose to 24,515 VND/USD in the selling price. After that, the USD/VND exchange rate gradually decreased.
While the gold market is booming, the USD has gone through many ups and downs as it fluctuates like a “roller coaster”. The USD/VND exchange rate increased sharply at the beginning of the week but “plummeted” at the end of the week. Illustrative photo
Notably, in the last trading session of the week (December 22), the USD suddenly plummeted, decreasing by 100 VND/USD to only 24,060 VND/USD - 24,400 VND/USD.
At other banks, this ups and downs also happened, so at the end of the week, the dollar did not fluctuate much if only considering the closing price.
At the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the USD/VND exchange rate is currently at: 24,115 VND/USD - 24,415 VND/USD, an increase of 5 VND/USD compared to the end of last week.
Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) listed the USD/VND exchange rate at 24,030 VND/USD - 24,450 VND/USD, down 85 VND/USD compared to Thursday but up 20 VND/USD compared to the end of last week.
The USD/VND exchange rate at Vietnam Technological and Commercial Joint Stock Bank (Techcombank) "closed" the week at: 24,075 VND/USD - 24,395 VND/USD, down 93 VND/USD compared to the previous day and down 35 VND/USD compared to the end of last week.
It can be seen that in the banking market, after 5 trading sessions, the US dollar did not change much, but fluctuations appeared in each specific trading session.
Dollar hits 4-month low on world markets
The dollar fell to near a more than four-month low on Friday ahead of key U.S. inflation data due later in the day that will provide further clarity on how much the Federal Reserve will have to cut interest rates next year.
The greenback hit a five-month low against the New Zealand dollar and a three-week low against the euro in early Asian trade, before turning positive late in the session.
The kiwi was last down 0.27% at $0.6277 after hitting a session high of $0.6298, while the euro peaked at $1.10125 before falling 0.12% to $1.0996.
“The distribution of inflation in the US is now seen as skewed and one-sided, with a high probability of being lower,” said Chris Weston, head of research at Pepperstone.
“As a result, the Fed has increased its scope for easing policy if needed, and while Fed officials are saying their work is not done and the final push to hit the 2% inflation target is the hardest part,” commented Chris Weston.
Against a basket of currencies, the greenback was last down 0.2% at 101.64.
However, rates are still on track to fall around 0.73%, possibly extending last week's 1.3% decline, after the Fed left the door open to a rate cut next year at its final policy meeting in 2023.
Sterling was up 0.17% at $1.271 and was on track for a modest weekly gain, pressured by UK inflation data this week that came in much weaker than expected.
“As inflation moves closer to target, markets will tend to increasingly discount hawkish comments from policymakers,” said Jane Foley, senior FX strategist at Rabobank. “This could be particularly true in the UK given the weak economic outlook.”
In Asia, the yen stood at 142.12 per dollar. Data on Friday showed Japan’s core consumer prices rose 2.5% in November from a year earlier, marking the slowest pace of growth in more than a year and putting pressure on the Bank of Japan (BOJ) to phase out its massive stimulus.
The Japanese currency looks set to end the week almost unchanged, after the BOJ earlier this week maintained its ultra-loose policy settings and gave some hints about when it could exit negative interest rates.
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