The recent outlook for the GBP to VND exchange rate reflects a mix of pressure from UK fiscal uncertainties and forecasts indicating potential depreciation for the Vietnamese đồng. Analysts note that the British pound (GBP) has shown some resilience recently, benefitting from the unveiling of the UK autumn budget. This development heightened investor sentiment, despite concerns over potential tax increases and the possibility of interest rate cuts from the Bank of England (BoE). As a result, the GBP has reached 30-day highs, trading near 34,913 VND, just 0.7% below its 3-month average.
However, forecasters warn that the pound may face downward pressure in the coming weeks, particularly as market participants digest fiscal risks associated with high tax burdens and adjustments in fiscal policy anticipated in the November budget. The GBP had experienced significant declines against major currencies, including a weak performance against the US dollar and the euro in October, driven by bearish market sentiment over the UK's economic prospects.
Simultaneously, the Vietnamese đồng (VND) is expected to experience some depreciation, with projections suggesting a 3% decline against the US dollar in 2025. This anticipated weakening is partially due to the strength of the dollar and ongoing global economic pressures. The State Bank of Vietnam has intervened in the forex market, selling significant amounts of US dollars to stabilize the VND and control depreciation. Economic experts remain cautious, especially after trade tensions with the US and the imposition of tariffs that necessitated a more competitive currency valuation.
In summary, the current environment presents a complex picture for the GBP/VND exchange rate. While the pound shows short-term strength, longer-term forecasts indicate potential headwinds from both domestic fiscal concerns and external pressures on the Vietnamese đồng, making it crucial for individuals and businesses involved in international transactions to remain vigilant and informed as market conditions evolve.
