GBP/VND Outlook:
The GBP/VND outlook is slightly weaker, but likely to move sideways. The rate is currently below its three-month average and trades within a stable range, with no clear driver pushing it one way or the other.
Key drivers:
• Rate gap: The Bank of England has maintained steady interest rates, while the U.S. Federal Reserve has recently cut rates, impacting GBP's value.
• Risk/commodities: Oil prices are currently volatile, which can create mixed reactions in risk appetite and subsequently affect GBP’s performance.
• One macro factor: Vietnam's banking system faces tight liquidity, with the State Bank responding with significant market interventions to stabilize rates.
Range:
The GBP/VND is likely to test extremes within its recent range, though it may not break out distinctly in either direction.
What could change it:
• Upside risk: A stronger-than-expected recovery in UK economic data could boost the pound.
• Downside risk: Continued domestic liquidity issues in Vietnam may pressure the đồng further.
