EUR/VND Outlook:
The EUR/VND is likely to move sideways as it is trading near its 90-day average and within its recent range. Current factors do not indicate a strong upward or downward momentum.
Key drivers:
• Rate gap: The European Central Bank's steady interest rates provide stability, while the State Bank of Vietnam faces liquidity pressures, which could support the Euro against the dong.
• Risk/commodities: Oil prices are at recent highs, influencing inflationary pressures in both zones, but the impact on currencies is mixed.
• One macro factor: Vietnam's trade imbalance is widening, with imports surging, increasing demand for foreign currencies and potentially pressuring the VND.
Range:
Expect the EUR/VND to hold steady in the current range, without testing extremes in the near term.
What could change it:
• Upside risk: A stronger-than-expected inflation report from the Eurozone could boost the Euro.
• Downside risk: Further declines in Vietnam’s trade surplus could increase pressure on the VND.
