The EUR to VND exchange rate is currently showing volatility influenced by a multitude of factors. As of late October 2023, the euro (EUR) is trading at approximately 30,767 VND, which reflects recent highs and remains just above its three-month average. Over the past months, the EUR has traded within a stable range of 30,210 to 31,309 VND. Analysts suggest that the current upward movement can be attributed to a weak US dollar and improved economic indicators from the Eurozone, particularly a revised services PMI and slight upticks in retail sales.
Despite this recent upward trend, challenges lie ahead. Recent forecasts indicate that concerns surrounding the ongoing geopolitical crisis in Ukraine continue to limit the euro's gains. Efforts toward a peaceful resolution have been further complicated by setbacks in negotiations between the U.S. and Russia. Additionally, the European Central Bank (ECB) is shifting towards a dovish monetary policy stance, with potential rate cuts anticipated by late 2025. This shift could further narrow the interest rate differential with the U.S., impacting the euro's attractiveness to investors.
On the other hand, the Vietnamese đồng (VND) is expected to face depreciation against the US dollar in 2025, forecasted at around 3%. This decline is influenced by a strong dollar and trade tensions, particularly following the U.S. imposition of tariffs on Vietnamese goods. The State Bank of Vietnam's interventions in the currency market, including recent dollar sales to stabilize the VND, may have short-term impacts but do not mitigate the long-term pressures on the currency.
Oil prices also play a crucial role in shaping both currencies. Currently, oil prices are below their three-month average, indicating bearish sentiment which could indirectly affect the euro due to the Eurozone's energy reliance. A decline in oil prices often leads to inflationary pressures which might influence the ECB's monetary policy further.
In summary, while the euro experiences short-term support from favorable economic developments, ongoing geopolitical uncertainties and shifting ECB policies may pose threats to its forward momentum against the VND, whose own trajectory is quite uncertain amidst global economic pressures. Stakeholders should remain vigilant on these developments to make informed currency transaction decisions.
