The recent exchange rate forecasts for the EUR to VND highlight a concerning outlook for the euro amid challenges within the Eurozone, including weak consumer confidence and geopolitical tensions. The Eurozone's consumer confidence index unexpectedly held at -14.2 in November, disappointing market expectations, which may put additional downward pressure on the euro. Analysts suggest that the upcoming PMIs could provide some relief if they indicate resilience in the private sector.
A dovish shift in the European Central Bank's (ECB) monetary policy is another concern for the euro's strength. Having previously raised interest rates to combat inflation, the ECB is now expected to lower rates to 3.5% by late 2025, decreasing the interest rate differential with U.S. monetary policy. This shift, compounded by the ongoing war in Ukraine and its impact on the Eurozone's economic stability, may contribute to a weaker euro in the medium term.
For the Vietnamese Đồng (VND), forecasts indicate a potential depreciation of around 3% against the US dollar in 2025, creating further pressure on the VND. Central Bank interventions, such as selling $1.5 billion in forward contracts, have been implemented to stabilize the currency amid external pressures. Trade tensions, particularly following the imposition of a 20% tariff on Vietnamese goods by the U.S., have also contributed to currency volatility, requiring adjustments to maintain export competitiveness.
The EUR to VND exchange rate is currently hovering near 30,400, reflecting a 1.0% decline from its three-month average of 30,727. This recent drop occurs within a stable trading range of 30,210 to 31,309, suggesting limited volatility in the short term.
Moreover, fluctuations in oil prices may have implications for the euro's value, as significant changes in OIL to USD price, currently at $63.19 and below its three-month average, create uncertainty. As oil prices remain volatile, with a 15% range from $60.96 to $70.13, any notable movements could influence both the euro and VND exchange rates through their effects on inflation and economic outlooks.
Overall, as both the euro and VND face pressures from regional and global economic factors, careful monitoring of these developments will be crucial for individuals and businesses engaging in international transactions.
