GBP/VND Outlook:
The GBP/VND is likely to decrease as it is currently trading below its recent average and is near recent lows. Pressures from domestic UK political concerns and anticipated interest rate cuts from the Bank of England also weigh on the pound.
Key drivers:
• Rate gap: The Bank of England has kept rates steady while the U.S. Federal Reserve has cut rates, leading to weaker GBP against a relatively stable VND.
• Risk/commodities: Global geopolitical tensions have prompted investors to shy away from riskier currencies like the GBP, impacting its valuation negatively against the VND.
• One macro factor: Recent reports of rising inflation in the UK, despite modest economic growth, have led to further concerns regarding the Bank of England’s monetary policy response.
Range:
Expect the GBP/VND to hold steady within its recent range, given the current pressures and lack of clear upward momentum.
What could change it:
• Upside risk: A positive surprise in UK retail sales data could bolster the pound.
• Downside risk: A stronger-than-expected interest rate cut from the Bank of England may exacerbate the pound's decline.
