GBP/VND Outlook:
GBP/VND is likely to decrease, currently trading 1% below its recent average and near its recent lows. This low positioning indicates limited momentum for recovery in the near term.
Key drivers:
• Rate gap: The Bank of England has a less aggressive monetary policy compared to the State Bank of Vietnam, which may affect GBP's performance against the VND.
• Risk/commodities: Global uncertainty, particularly regarding geopolitical tensions, has driven investors towards safe-haven currencies, putting additional pressure on GBP.
• One macro factor: Vietnam's projected GDP growth of 10% for 2026 may boost confidence in the VND, further weakening the GBP/VND exchange rate.
Range:
GBP/VND is likely to drift within its stable range, although it remains near the lower end at present.
What could change it:
• Upside risk: Improved economic data from the UK could strengthen GBP.
• Downside risk: Escalation in geopolitical tensions may further weaken GBP against VND.