EUR/VND Outlook:
The EUR/VND exchange rate is likely to move sideways, as it is currently near its recent average and lacks a clear driver to push it decisively in either direction.
Key drivers:
• Rate gap: The European Central Bank is maintaining steady rates amid uncertainties, while the State Bank of Vietnam is also managing domestic liquidity pressures effectively.
• Risk/commodities: Oil prices are notably above their average, which can affect the euro positively but also complicates inflation dynamics for Vietnam.
• One macro factor: Vietnam's narrowing trade surplus is increasing demand for foreign currency, which could weigh on the VND.
Range:
The EUR/VND is expected to hold within its recent stable range as it navigates mixed economic signals.
What could change it:
• Upside risk: A stronger-than-expected improvement in Eurozone economic indicators could bolster the euro.
• Downside risk: Continued pressure on the VND due to escalating import growth and a narrowing trade surplus might weaken its position.
