The EUR to VND exchange rate has recently experienced some volatility, with the euro trading at 14-day lows near 30,348 VND, which is about 1.2% below its three-month average of 30,722 VND. This decline reflects the ongoing pressures on the euro, driven by weaker consumer confidence within the Eurozone, which remained stagnant at -14.2 in November. Analysts note that heightened EU-China tensions and concerns over geopolitical stability are contributing factors affecting the euro’s performance.
Recent developments indicate a potential shift in the Eurozone’s monetary policy. The European Central Bank (ECB) raised rates to combat inflation, but the possibility of a dovish turn has emerged due to signs of slowing economic growth. Market expectations suggest that rates may be cut to 3.5% by late 2025, which could reduce the interest rate differential against the U.S. dollar and further impact the euro's strength.
Furthermore, geopolitical tensions, particularly in relation to the ongoing war in Ukraine, have weighed heavily on the euro’s stability. The potential for either prolonged conflict or a resolution greatly influences market sentiment, impacting the euro's exchange rate with various currencies, including the Vietnamese đồng (VND).
On the VND side, forecasts indicate a depreciation of approximately 3% against the US dollar in 2025, further complicating its relationship with the euro. Recent policy interventions by the State Bank of Vietnam to stabilize the VND amidst exchange rate pressures, including a substantial sale of dollars, have been critical. The U.S. Federal Reserve's recent rate cuts also provided some respite, allowing Vietnam more room to manage its currency.
The euro is notably sensitive to changes in the global oil market, which is also currently experiencing downward pressure. Crude oil prices are presently at $62.56 per barrel, about 4.4% below the three-month average of $65.44. This volatility in oil prices could further contribute to the economic conditions surrounding the euro and, in turn, its value against currencies like the VND.
In summary, the EUR/VND exchange rate outlook will likely be shaped by a complex interplay of monetary policy shifts from the ECB, ongoing geopolitical tensions, and the economic forecasts for both the Eurozone and Vietnam. Traders and businesses engaged in international transactions should remain vigilant about these market dynamics as they navigate currency exchanges.
