The EUR/VND pair is currently range-bound, as it sits just below the 90-day average and within the stable middle of its recent 3-month range.
Key drivers:
• Rate gap: The European Central Bank's cautious monetary policy contrasts with Vietnam's projected economic growth and potential currency adjustment, affecting the Euro's strength against the Đồng.
• Risk/commodities: Oil prices are trending above average, which can impact the Euro as energy costs affect the broader Eurozone economy, potentially placing additional pressure on the currency.
• One macro factor: Vietnam's GDP growth is projected at a solid 7%, while the IMF's recent currency adjustment adds complexity to the VND's outlook.
Range: EUR/VND movement is likely to hold steady within the 3-month range, as current conditions do not suggest imminent shifts.
What could change it:
• Upside risk: A stronger-than-expected recovery in Eurozone economic metrics could support the Euro.
• Downside risk: Continued weakening in Eurozone consumer metrics or geopolitical tensions may further pressure the Euro.