EUR/VND Outlook:
The EUR/VND exchange rate is currently below its 90-day average and near its recent lows. The outlook is slightly weaker but likely to move sideways in the absence of clear drivers.
Key drivers:
• Rate gap: The European Central Bank (ECB) is maintaining an accommodative monetary policy, which puts pressure on the Euro against the VND.
• Risk/commodities: Oil prices are at 90-day highs, impacting inflation in the Eurozone and indirectly affecting the Euro's value.
• Macro factor: Vietnam is experiencing tight liquidity issues in its banking system, which may lead to further depreciation of the Đồng.
Range:
Expect the EUR/VND to remain within its recent 3.6% trading range, with limited movement in either direction.
What could change it:
• Upside risk: A significant increase in Eurozone private sector growth could strengthen the Euro.
• Downside risk: Continued tight liquidity issues in Vietnam could weaken the Đồng further.