Free market is superior to banking
From early morning on December 14, the USD/VND exchange rate simultaneously decreased sharply in both the free market and the banking market. Notably, the free USD price is increasingly surpassing the bank USD price.
Specifically, at the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), the USD/VND exchange rate is traded at: 24,050 VND/USD - 24,350 VND/USD, down 80 VND/USD for both buying and selling compared to the end of yesterday.
By noon, the bank adjusted the USD exchange rate to VND24,085/USD – VND24,385/USD. Thus, compared to the end of yesterday, the exchange rate has only decreased by VND45/USD.
The USD/VND exchange rate fell sharply after the FED kept interest rates unchanged. The USD on the free market is much higher than that on the banking market. Illustrative photo
Joint Stock Commercial Bank for Foreign Trade of Vietnam is listing the USD/VND exchange rate at: 24,060 VND/USD - 24,400 VND/USD, down 20 VND/USD in both buying and selling directions.
Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) adjusted the USD price down to 24,066 VND/USD - 24,406 VND/USD, almost unchanged in buying price but down 79 VND/USD in selling price.
The exchange rate at Vietnam Technological and Commercial Joint Stock Bank (Techcombank) is exchanged at: 24,075 VND/USD - 24,383 VND/USD, down 52 VND/USD for buying and down 50 VND/USD for selling.
In the free market, the USD also decreased by about 20 VND/USD.
At Hang Bac and Ha Trung – the “golden streets” of Hanoi, the USD/VND exchange rate is commonly bought and sold at: 24,550 VND/USD – 24,630 VND/USD. At different stores, the price difference is about 10 VND/USD.
It can be seen that for a long time, the USD price in the free market was often lower than in the banking system. However, recently, the "wind has changed direction". And as of December 14, the free USD price is much higher than the bank USD.
USD falls sharply after FED keeps interest rates unchanged
The dollar came under pressure on Thursday after the US Federal Reserve's latest economic projections indicated that the interest rate hike cycle is over and borrowing costs will fall by 2024.
Both the euro and the Japanese yen jumped in response, with the European Central Bank (ECB) set to announce its policy decision later on Thursday and the Bank of Japan due next week.
Fed Chairman Jerome Powell said at the Federal Open Market Committee (FOMC) meeting on Wednesday that the historic tightening of monetary policy may be coming to an end and that the discussion of cutting borrowing costs is “on the table.” Policymakers were nearly unanimous in predicting that borrowing costs will fall by 2024.
“This is a big development for the market as we head into the new year and brings much-needed clarity. And clarity in this case means risk-taking,” said Matt Simpson, senior market analyst at City Index.
The FOMC news is likely to overshadow upcoming economic data ahead of next week’s consumer spending data, creating “potential for further downside for the U.S. dollar,” he added. The U.S. dollar index, which measures the greenback against a basket of currencies, was at 102.87 after falling to 102.77 overnight.
Markets are now pricing in about a 75% chance the Fed will cut rates in March, compared with 54% a week ago, according to the CME FedWatch tool.
While recent economic reports have reinforced expectations that the Fed can achieve a soft landing for the US economy, Powell left the door open to acting again if needed, noting that “the economy has surprised forecasters.”
Market focus now turns to a series of central bank decisions, including the ECB and the Bank of England (BoE), Norges Bank and the Swiss National Bank.
Source
Comment (0)