Free USD surpasses 25,000 VND mark
This week, the USD continued to heat up in the free market. After many shocking increases, by the end of the week, the USD/VND exchange rate officially reached 25,000 VND/USD.
At Hang Bac and Ha Trung – the “foreign currency streets” of Hanoi, stores simultaneously adjusted the dollar price up by 90 VND/USD in both buying and selling directions to 24,920 VND/USD – 25,020 VND/USD. At different stores, the transaction may differ by 10 VND/USD.
In the banking market, the greenback has a slower growth rate after 1 week of trading.
At the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the USD/VND exchange rate closed the week at: 24,375 VND/USD - 24,715 VND/USD, up 85 VND/USD in both buying and selling directions, equivalent to 0.35%.
The USD/VND exchange rate on the free market continues to be "hot" and has officially surpassed the 25,000 VND/USD mark. Illustrative photo
The Vietnam Bank for Agriculture and Rural Development (Agribank) adjusted the exchange rate up by 75 VND/USD, equivalent to 0.31% to a high of 24,395 VND/USD - 24,715 VND/USD.
Tien Phong Commercial Joint Stock Bank (TPBank) listed the USD price at: 24,394 VND/USD - 24,724 VND/USD, up 66 VND/USD, equivalent to 0.27%. At Vietnam Technological and Commercial Joint Stock Bank (Techcombank), the USD/VND exchange rate closed the week at: 24,398 VND/USD - 24,704 VND/USD, up 58 VND/USD, equivalent to 0.24%.
In many jurisdictions, the greenback's gains were modest.
The USD/VND exchange rate at the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is traded at: 24,400 VND/USD - 24,700 VND/USD, up 70 VND/USD, equivalent to 0.16%. The Joint Stock Commercial Bank for Industry and Trade of Vietnam (VietinBank) closed the exchange rate at: 24,335 VND/USD - 24,755 VND/USD, up 40 VND/USD, equivalent to 0.16%.
US dollar index outperforms USD/VND exchange rate
The US dollar edged lower on Friday, pausing after five straight sessions of gains but still poised for a weekly gain, as recent economic data and comments from Federal Reserve officials dampened expectations for a quick interest rate cut.
The greenback strengthened early in the session after economic data showed the University of Michigan's preliminary index of overall consumer sentiment hit 78.8 this month, the highest since July 2021, compared with 69.7 in December and the 70.0 estimate of economists polled by Reuters.
The data comes on the heels of solid labor market data and retail sales earlier this week that showed the economy remains solid.
Expectations of a rate cut by the US Federal Reserve (Fed) of at least 25 basis points (bps) in March have fallen below 50% according to the CME FedWatch Tool, and traders are now targeting May as the likely month for a rate cut announcement.
“The Fed is going to start cutting rates and the reason they are going to start cutting rates is because the economy is going to weaken – that has been the mantra since the Fed started raising rates,” said Joseph Trevisani, senior analyst at FXStreet in New York.
The dollar index, which tracks the greenback against a basket of six currencies, was down 0.3% at 103.26, on track for a five-session winning streak, but was up 0.8% for the week.
A steady stream of Fed officials, starting with Governor Christopher Waller on Tuesday, have pushed back against market expectations that the central bank will embark on a rapid path of rate cuts. Waller said the Fed should proceed “methodically and carefully” until it is clear lower inflation will be sustained.
Chicago Fed President Austan Goolsbee said Friday that more inflation data is needed in several more weeks before any decision on rate cuts is made.
Additionally, San Francisco Federal Reserve Bank President Mary Daly said there is still a lot of work to do to address inflation and it is too early to think that a rate cut is imminent.
The euro rose 0.17% to $1.0893 against the dollar but was down about 0.5% for the week. JPMorgan on Friday extended its expectations for the European Central Bank to start cutting interest rates from September to June, but said it remained “cautious” about inflation and wage growth trends.
The yen was flat against the greenback at 148.15. The Bank of Japan is scheduled to hold a policy meeting on Monday and Tuesday next week and is likely to maintain its ultra-loose monetary settings. The dollar has gained more than 2% against the Japanese currency this week and is on track for a third straight weekly gain.
Sterling was last trading at $1.27, down 0.03% on the day after falling to $1.2662 after data showed UK retail sales fell the most in three years in December.
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