The GBP to VND exchange rate has seen notable movements recently, with the GBP trading at around 30-day highs near 34,913 VND, just under its three-month average of 35,153 VND. The currency pair has remained relatively stable within a 5.1% range over the past few months, fluctuating between 34,259 and 36,001 VND.
Recent forecasts indicate growing concerns that the British pound may weaken further. Analysts have noted that investor sentiment is diminishing ahead of the UK's upcoming budget announcement on November 26, primarily due to worries surrounding fiscal credibility and potential tax hikes. With expectations that the Bank of England may cut interest rates soon—potentially reducing the pound's appeal—forecasters are increasingly bearish on the GBP. This sentiment is reflected in the pound's recent performance, as it has reached multi-month lows against the US dollar and is struggling against the Euro.
The economic outlook for the UK remains challenging, with the Office for Budget Responsibility expected to downgrade productivity forecasts, leading to concerns about a potential £20 billion budget shortfall. The pressure from these fiscal uncertainties has the market closely monitoring any developments concerning interest rates, especially in conjunction with the anticipated Bank of England meeting.
On the other hand, the Vietnamese đồng faces a different set of challenges. Experts predict a depreciation of approximately 3% against the US dollar in 2025, influenced by global economic policies and a strong USD. In response to exchange rate pressures, the State Bank of Vietnam has actively intervened, selling $1.5 billion through forward contracts to stabilize the currency. Additionally, the recent US Federal Reserve rate cuts have provided some relief for the VND, aiding its stabilization efforts.
As the GBP to VND rate hovers near recent highs, market participants should remain vigilant regarding incoming data and central bank signals from both the UK and Vietnam that could significantly impact exchange rates in the coming weeks. The interplay between the UK's fiscal measures and Vietnam's strategy to shore up the đồng will be crucial in determining future trends in this currency pair.
