The EUR/VND exchange rate is influenced by a mix of dynamics affecting both the euro and the Vietnamese đồng. Recently, the euro has shown signs of firmness, primarily driven by its negative correlation with a weaker US dollar. Despite this positive momentum, recent Eurozone industrial production figures have not met expectations, which may limit further gains in the euro.
Analysts have noted several leading factors that could affect the euro’s trajectory in the coming months. Following a recent shift towards a dovish stance from the European Central Bank (ECB), expectations are building for potential interest rate cuts from 4.0% to 3.5% by late 2025. This anticipated reduction in interest rates could narrow the interest rate differential with the US Federal Reserve, subsequently putting downward pressure on the euro.
Moreover, the recent geopolitical landscape, particularly the ongoing conflict in Ukraine, continues to significantly affect the euro's stability. Analysts emphasize that fluctuations in energy supply and sanctions on Russia have fostered economic uncertainty for the Eurozone. This context suggests that while there may be opportunities for appreciation, volatility will likely persist, especially if the conflict escalates or stabilizes.
On the other hand, developments impacting the VND are also critical. A forecasted depreciation of around 3% against the US dollar is expected in 2025 due to the strength of the dollar and ongoing trade tensions leading to tariff impositions on Vietnamese goods. The State Bank of Vietnam's recent interventions aim to stabilize the currency, especially following actions such as the sale of approximately $1.5 billion in forward contracts.
The current trading level for EUR to VND stands at 30,603, just below its three-month average, with a relatively stable range of 3.6% in recent months. This stability suggests that the euro's performance must contend with a range of external and internal economic factors that could drive fluctuations, particularly with uncertainties surrounding oil prices, currently trading at $63.86, which is also below its average, reflecting potential impacts on inflation and economic growth across the Eurozone.
In summary, currency market analysts suggest that both the euro and the Vietnamese đồng face distinct challenges and opportunities influenced by monetary policies, geopolitical events, and external market conditions. These factors are likely to dictate exchange rates moving forward, keeping close attention to economic developments on both sides.
