According to the latest data released by the General Statistics Office (GSO), in May, as of May 25, 2023, the US dollar index on the international market reached 102.28 points, up 0.78% over the previous month.
GSO analyzed that in the world, the US dollar fluctuated between increases and decreases in value after the US Federal Reserve (FED) raised interest rates and uncertainty about raising the US debt limit to prevent default.
Domestically, the average US dollar price in the free market is around 23,640 VND/USD. The US dollar price index in May 2023 decreased by 0.11% compared to the previous month; decreased by 2.37% compared to December 2022; increased by 1.73% compared to the same period last year; the average in the first 5 months of 2023 increased by 2.91%.
After reaching a 10-week peak, the US dollar has fallen sharply despite the US having reached an agreement on the debt ceiling to avoid default. Meanwhile, in the domestic market, the USD/VND exchange rate is in a "chaotic" trend. Illustrative photo
It can be seen that in May, the USD/VND exchange rate did not depend on the movements of the US dollar in the world market. In the last days of May, it seems that this situation will continue.
On May 31, the USD slid from its 10-week peak, but the USD/VND exchange rate had no clear trend.
USD/VND exchange rate trend "disordered"
In the domestic market, the USD has no clear trend, the USD/VND exchange rate is adjusted up, down or stable in each different unit.
Vietnam Bank for Agriculture and Rural Development (Agribank) and Vietnam Technological and Commercial Joint Stock Bank (Techcombank) are two representatives of the "bullish" side.
At Techcombank, the USD/VND exchange rate is traded at: 23,332 VND/USD – 23,665 VND/USD, up 6 VND/USD for buying, up 5 VND/USD for selling. The exchange rate at Agribank is traded at: 23,305 VND/USD – 23,635 VND/USD, up 5 VND/USD for both buying and selling.
The exchange rate at Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) is bought and sold at: 23,241 VND/USD - 23,661 VND/USD, up 16 VND/USD for buying but down 24 VND/USD for selling.
At the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the listed exchange rate is: 23,285 VND/USD - 23,655 VND/USD, unchanged from the end of yesterday. At the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Export Import Commercial Joint Stock Bank, the exchange rate has not changed and is listed at: 23,335 VND/USD - 23,635 VND/USD and 23,340 VND/USD - 23/640 VND/USD,
In the free market, the greenback also fluctuated very little. At Hang Bac and Ha Trung, the “gold streets” and “foreign currency streets” in Hanoi, the USD/VND exchange rate was commonly traded at 23,440 VND/USD -23,490 VND/USD.
USD slides from 10-week peak
Currency markets were volatile mid-week as the dollar hit a 10-week high against its peers and a six-month high against the yen before retreating after Japanese officials lifted their currency.
Japan will closely monitor currency market moves and respond “appropriately” as needed, the country’s top currency diplomat said on Tuesday after financial authorities met to deal with the yen’s weakness to a six-month low against the dollar.
The yen strengthened on news of the unscheduled meeting and held onto those gains, with the currency up 0.46% against the dollar at 139.80 having earlier climbed to 140.93, its highest since November 2022.
The US dollar fell after hitting a 10-week high. The greenback was the biggest mover against the Japanese yen. Illustrative photo
Meanwhile, the dollar strengthened after U.S. President Joe Biden and Republican House Speaker Kevin McCarthy on Sunday signed a deal to temporarily suspend the U.S. debt ceiling and limit some federal spending to prevent a default.
That helped the dollar index, which measures the U.S. currency against six major currencies, hit a 10-week high of 104.53 in European trading. But it later retreated, falling as low as 103.870. It was last down 0.12% at 104.09, recouping some of its earlier losses.
“A lot of that has to do with how low oil has been today,” said Erik Bregar, director of forex and precious metals risk management at Silver Gold Bull.
Oil prices fell more than 4% on Tuesday as mixed messages from major producers clouded the supply outlook ahead of an OPEC+ meeting later this week.
“People are scratching their heads: what does this mean for demand?” Bregar said. “And with that, I think we’ve seen a little bit of safe-haven bid back into the dollar.”
Adam Button, chief currency analyst at ForexLive, theorized that the dollar's decline despite a debt ceiling deal could lead to profit-taking at the end of the month.
The euro was last up 0.2% at $1.0728, having earlier hit a two-month low, while sterling was last trading at $1.4061, up 0.46% on the day.
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